Question

interest accrued on the note payable to rent it amounted to $750 at dec 31

Answer 1

Interest accrued on the note payable is a current liability that has to be recorded since the accrual principal of accounting is to be follwed. Simultaneously, interest expense is also recorded to recognise the interest expense bbelonging to that period which has though not yet paid in cash.

The journal entry would be:

Dec 31: Interest expense Debited by $750
Interest payable Credited by $750

Interest expense will go to Income Statement, while Interest payable will go the Current Liabilities section of balance sheet.