Bayside Corporation began 2014 owing notes payable of $3.5 million. During 2014 Bayside borrowed $1.7 million on notes payable and paid off $1.6 million of notes payable from prior years. Interest expense for the year was $0.7 million, including $0.1 million of interest payable accrued at December 31, 2014.
Show what Bayside should report for these facts on the following statements
1. Income statement for 2014
a. Interest expense
2. Balance sheet as of December 31, 2014
a. Notes payable
b. Interest payable