On July 1st 2018, Ponds received a 9%, six-month note receivable from Saeed Ghani, in defrayal of a Rs. 1,000,000 account receivable. Prepare journal entries to record the following transactions: a. The receipt of the note receivable on July 1 st 2018. b. To record an accrued interest revenue on December 31, 2018. c. The collection of the principal and interest on December 31, 2018.
Depreciation Methods
The word "depreciation" is defined as an accounting method wherein the cost of tangible assets is spread over its useful life and it usually denotes how much of the assets value has been used up. The depreciation is usually considered as an operating expense. The main reason behind depreciation includes wear and tear of the assets, obsolescence etc.
Depreciation Accounting
In terms of accounting, with the passage of time the value of a fixed asset (like machinery, plants, furniture etc.) goes down over a specific period of time is known as depreciation. Now, the question comes in your mind, why the value of the fixed asset reduces over time.
On July 1st 2018, Ponds received a 9%, six-month note receivable from Saeed Ghani, in defrayal
of a Rs. 1,000,000 account receivable. Prepare
transactions:
a. The receipt of the note receivable on July 1
st 2018.
b. To record an accrued interest revenue on December 31, 2018.
c. The collection of the principal and interest on December 31, 2018.
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