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College Accounting, Chapters 1-27

23rd Edition
HEINTZ + 1 other
ISBN: 9781337794756

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Chapter
Section
BuyFindarrow_forward

College Accounting, Chapters 1-27

23rd Edition
HEINTZ + 1 other
ISBN: 9781337794756
Textbook Problem

What is the appropriate entry for accrued interest on notes payable for an interest-bearing note? For a non-interest-hearing note from a bank?

To determine

Mention the appropriate entry for accrued interest on notes payable for interest-bearing-note and for a non-interest-bearing note from a bank.

Explanation

Accrued interest on notes payable:

Accrued interest on notes payable is an interest expense that is incurred but yet to be paid and it is recorded for notes payable issued during one period and due in the following period.

The appropriate entry for an interest-bearing note is as follows:

DateAccount Titles and Explanation

Debit

(Amount in $)

Credit

(Amount in $)

Interest Expense  xxx
Accrued Interest Payablexxx
 

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