会计学原理第19版(全英版)242112574.pptVIP

* Part I.On October 30, Matrix pays the note and all interest to Carter. Let’s prepare the journal entry on the books of Matrix.Part II.We debit, or decrease, the notes payable to Carter for $5,000 and debit interest expense for $150. The $150 is interest at a 12% annual rate for 90 days. Finally, we will credit, or decrease, the cash account for the total of $5,150. * Instead of replacing an account payable with a note payable, let’s look at a promissory note issued to borrow money from the bank.This is a typical promissory note. Notice that we have a definite payee, American Bank in Nashville, Tennessee, a determinable amount of the payment, $20,000 plus interest at 6% for 90 days. The entire amount is to be paid on November 30, 2009, the date the note matures.Let’s look at the accounting involved over the life of this note payable. * On September 1, the date the note was signed, Jackson Smith will debit the cash account for $20,000 and credit the current liability, notes payable, for the same amount. * Part I.Let’s prepare the journal entry at November 30, 2009, when the note matures and is paid by Jackson Smith.Part II. We will debit notes payable for $20,000 and debit interest expense for $300. The $300 of interest expense is calculated by multiplying $20,000 times 6% and modifying this amount for the length of time the note was outstanding during the year (90 days divided by 360 days). To complete the entry, we need to credit cash for the total amount paid of $20,300. * If a short-term note payable is issued in one accounting period but is not payable until the following accounting period, it is necessary to make an adjusting entry at year-end to record the interest expense. Let’s look at a specific example. * On December 16, 2009, James Burrows borrows $8,000 and agrees to repay that amount plus interest at 12% annual rate in 60 days. First, let’s prepare the journal entry to record the issuance of the note. Part I. On December 16, we will de