Detailed Answer
Correct answer: (D)
The company has $350 of interest payable that is a long-term liability.
-A current liability is a debt the company reasonably expects to pay:
1) from existing current assets or through the creation of other current liabilities
2) within the next year or the operating cycle, whichever is longer
-Since both the interest payable and the note payable are expected to be paid more than one year after the financial report date (i.e. this is a 36-month note), they will be considered long-term liabilities.
**Interest payable=
(How much borrowed the interest on the note how many months out of the year that have passed/12)
=(7,000 .10 6/12)
=$350