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    Daisy2's Avatar
    Daisy2 Posts: 5, Reputation: 1
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    #1

    Feb 7, 2007, 09:37 PM
    journal entry
    Does anyone know how to write the journal entry for this?

    Transaction occurred on April 1, 20X5:

    Paid the $16,000 note and all interest accrued to date.
    The company had borrowed the $16,000 on October 1, 20X4.
    Interest accrued on the note at a rate of 10% annually.
    CaptainForest's Avatar
    CaptainForest Posts: 3,645, Reputation: 393
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    #2

    Feb 8, 2007, 10:15 PM
    First, we must compute the total interest.

    I will take it your dates are Oct 2004 – April 2005.

    Therefore a total of 6 months outstanding

    10% annually = 5% in this case.

    16,000 x 0.05 = 800

    Dr. Notes Payable 16,000
    Dr. Interest Expense 800
    Cr. Cash 16,800
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