If a creditor required the company to sign a promissory note for the amount owed, the company will record and report the amount as Notes Payable. If a creditor is a vendor or supplier that did not require the company to sign a promissory note, the company will likely report the amounts owed as Accounts Payable. Other examples of creditors include company's employees (who are owed wages and bonuses), governments (who are owed taxes), and customers (who made deposits or other prepayments).
Some creditors are known as secured creditors because they have a lien or other legal claim to the company's (debtor's) assets. Other creditors are often unsecured creditors since they do not have a lien or legal right to specific assets of the company.
Most balance sheets report the amounts owed to creditors in two groupings: current liabilities and non-current (or long-term) liabilities.
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