sweetsandmore
Nov 10, 2009, 07:25 AM
The first two months of opening the business the amortization schedule has interest of
$708.33 and 585.25, while the first note payable was due on the 3rd month.
After I input the first month of interest:
Interest Expense $708.33
Interest Payable $708.33
Do we reverse this at the end of the first month to zero out the interest and then input the second months interest:
Interest Expense $1,255.90
Interest Payable $1,255.90
2nd question
When I input the invoice for the 3rd month, which is the first month that we have to pay the note what account do I post the 2nd debit to?
Interest Expense $1,266.37
Principal $ 715.89 So, this debit to principal is it correct?
Note payable $ 1,982.26
$708.33 and 585.25, while the first note payable was due on the 3rd month.
After I input the first month of interest:
Interest Expense $708.33
Interest Payable $708.33
Do we reverse this at the end of the first month to zero out the interest and then input the second months interest:
Interest Expense $1,255.90
Interest Payable $1,255.90
2nd question
When I input the invoice for the 3rd month, which is the first month that we have to pay the note what account do I post the 2nd debit to?
Interest Expense $1,266.37
Principal $ 715.89 So, this debit to principal is it correct?
Note payable $ 1,982.26