Accounting Calculation

timer Asked: Aug 27th, 2014
account_balance_wallet $5

Question Description

A business issued a 30-day, 7% note for $36,000 to a creditor on account. Illustrate the effects on the accounts and financial statements of recording (a) the issuance of the note and (b) the payment of the note at maturity, including interest.

Tutor Answer

School: UCLA

DR Purchase ( name of the item ) = $36,000 
& CR Note Payable = $36,000 

on the  30th day 

DR Note Payable $ 36,000 
DR Interest on Note $ 210 ( 36000 x 7/100 x30/360 ) 
CR Bank $ 36,210

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