Chapter 4 Note Payable -Accrued Interest

Chapter 4 Note Payable -Accrued Interest - Note Receivable...

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Chapter 4 Pages 175-176 Accrued Interest Note Payable Face Value of Note: $10,000 Annual Interest Rate: 10% Date of Note: October 1, 2009 Due Date: October 1, 2010 What would have been your entry when recorded the note on October 1, 2009? Date DR CR 10/1/09 Cash 10,000 Note Payable 10,000 Assuming you do not make monthly entries, record your year-end adjustment… Date DR CR 12/31/09 Interest Expense 250 Interest Payable 250 Now assume it’s October 1, 2010. What would be your entry to pay off the note? Date DR CR 10/1/10 Note Payable 10,000 Interest Payable 250 Interest Expense 750 Cash 11,000
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Now let’s assume it’s a…
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Unformatted text preview: Note Receivable ( Same terms and conditions) What would have been your entry when recorded the note on October 1, 2009? Date DR CR 10/1/09 Note Receivable 10,000 Cash 10,000 Assuming your company also does not make monthly entries, record your year-end adjustment Date DR CR 12/31/09 Interest Receivable 250 Interest Income 250 Now assume its October 1, 2010. What would be your entry when the other company paid off the note? Date DR CR 10/1/10 Cash $11,000 Note Receivable 10,000 Interest Receivable 250 Interest Income 750...
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Chapter 4 Note Payable -Accrued Interest - Note Receivable...

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