CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning

LESSON 20-2LESSON 20-2

Notes Payable

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LESSON 20-2CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning

SIGNING A NOTE PAYABLESIGNING A NOTE PAYABLE

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May 18. Signed a 90-day, 6% note, $20,000.00. Receipt No. 345.

1. Write the date.

2. Write the account title.

3. Write the receipt number.

4. Write the principle amount in the General Credit column.

5. Write the same amount in the Cash Debit column.

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LESSON 20-2CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning

PAYING PRINCIPLE AND INTEREST ON A PAYING PRINCIPLE AND INTEREST ON A NOTE PAYABLENOTE PAYABLE

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August 16. Paid cash for the maturity value of the May 18 note: principal, $20,000.00, plus interest, $300.00; total, $20,300.00. Check No. 721.

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1. Write the date. 6. Write the interest expense amount.2. Write the account title.

7. Write the amount of cash paid.

3. Write the check number.4. Write the note’s principal amount.

5. Write the account title.

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LESSON 20-2CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning

SIGNING A NOTE PAYABLE FOR AN SIGNING A NOTE PAYABLE FOR AN EXTENSION OF TIMEEXTENSION OF TIME

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June 5. Restaurant Supply signed a 90-day, 12% note to Hayport Company for an extension of time on its account payable, $4,000.00. Memorandum No. 66.

2. Credit to Notes Payable

1. Debit to Accounts Payable

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LESSON 20-2CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning

PAYING A NOTE PAYABLE ISSUED FOR PAYING A NOTE PAYABLE ISSUED FOR AN EXTENSION OF TIMEAN EXTENSION OF TIME page 596

September 3. Paid cash for the maturity value of the note payable to Hayport Company: principal, $4,000.00, plus interest, $120.00; total, $4,120.00. Check No. 722.

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LESSON 20-2CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning

TERMS REVIEWTERMS REVIEW

current liabilities interest expense

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