A business issued a 30day 7 note for 36000 to a creditor on

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. show all work

Solution

a) Supplier Debit $36000

7% notes payable credit $ 36000

b) 7% notes payable debit $ 36000

Interest debit $ 210 (36000*7%*30/360)

bank Credit $ 36210