A promissory note, sometimes referred to as a note payable, is a legal instrument, in which one party promises in writing to pay a determinate sum of money to the other, either at a fixed or determinable future time or on demand of the payee, under specific terms.

What is notes payable with example?

What is an example of notes payable? Purchasing a building, obtaining a company car, or receiving a loan from a bank are all examples of notes payable. Notes payable can be referred to a short-term liability (lt;1 year) or a long-term liability (1+ year) depending on the loan's due date.

What is considered a note payable?

Notes payable is considered a written promise to repay the loan and usually specifies the exact terms of the agreement such as the amount that needs to be repaid, the due date for each payment, the interest rate included in the agreement, and the amount of interest that will need to be repaid.