Entries
When the loan matures (comes due), the maker expects to receive payment of the principal plus the interest. The entries involved in the process of issuing a note are:
To record the purchase of a $1,000, 90-day note at 12 percent on January 5, 2002:
To record payment of the note at maturity on April 5, 2002:
In addition to notes, a company may also purchase bonds or loans. Loans, bonds, and notes are all very similar. The difference among them is the underlying legal document that formalizes the transaction. Typically, loans and notes have ...
Get Accounting Demystified now with the O’Reilly learning platform.
O’Reilly members experience books, live events, courses curated by job role, and more from O’Reilly and nearly 200 top publishers.
