On May 1, 2016, Butler Services issued a long-term note payable for
$35,000. The note will be paid over five-years with annual
principal payments of $7,000, plus interest, on May 1 of each year
beginning on May 1, 2017. Prepare the journal entry for the
issuance of the note.
Entry for notes issue |
|||
Date |
General Journal |
Debit |
Credit |
1-May-16 |
Cash |
$ 35,000.00 |
|
Notes payable |
$ 35,000.00 |
||
(Notes payable issued) |
A five year notes payable is a long term notes payable. Interest on notes payable will be recorded at the year end and at the time of payment of installments. Adjusting entry for interest accrues will be made on December 31 2016 for interest for 8 months.
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