Question

Entries for Notes Payable A business issued a 60-day, 10% note for $93,000 to a creditor on account. Journalize the entries to record (a) the issuance of the note and (b) the payment of the note at maturity, including interest. Assume a 360-day year. If an amount box does not require an entry, leave it blank.

Answer 1

No	Accounts Tittles and explanations	Debit ($)	Credit ($)
(a)	Accounts Payable A/c	93,000
	To Note Payable A/c		93,000
	[Entry to record the issuance of the note to the creditor]
(b)	Note Payable A/c	93,000
	Interest Expense A/c	1,550
	To Cash A/c		94,550
	[ Entry to record the payment of the note at maturity, including interest ]

*Interest Expense on the note payable at maturity = $93,000 x 10% x 60/360 = $1,550