Hi all,

I am sort of confused by the time on how to record this entry.

This entry applies to the company for the month of December, 2005.

There is a $15,000 long-term note listed in a company's trial balance is a 8%, five-year, interest-bearing note with interest payable annually on December 31. The note was signed with First national Bank on December 31, 2005.

If the note was signed on December 31, 2005, and the period ends at December 31,2005. How do I record this entry?

Thank you vey much!

Quote:

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Originally Posted by Shirleyan

Hi all,

I am sort of confused by the time on how to record this entry.

This entry applies to the company for the month of December, 2005.

There is a $15,000 long-term note listed in a company's trial balance is a 8%, five-year, interest-bearing note with interest payable annually on December 31. The note was signed with First national Bank on December 31, 2005.

If the note was signed on December 31, 2005, and the period ends at December 31,2005. How do I record this entry?

Thank you vey much!

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If the note was signed on Dec 31, and money was transferred to the company on the same date then it would just be:

Dr cash 15,000
Cr. Notes payable 15,000

Interest will be recorded when incurred/paid.