1. What is the difference between classification of a note as short term or long term?
2. At the beginning of year 1, B Co. has a note payable of $72,000 that calls for an annual payment of $16,246, which includes both principal and interest. If the interest rate is 8 percent. What is the amount of interest expense in year1 and in year 2? What is the balance of the note at the end of year 2?
3. What is the purpose of a line of credit for a business? Why would a company choose to obtain a line of credit instead of issuing bonds?

16. What mechanism is used to adjust the stated interest rate to the market rate of interest?

18. What type of transaction is the issuance of bonds by a company?