[Meli083]

Hey I am having trouble with this entry into the T-account

For the month of May 2008:
Paid current portion of Note Payable plus interest. This 6-year note carries a 5% interest rate. This is the first annual payment made on the note. No interest has been accrued.
Note Payable - Current - $4800
NP Long Term - $24000
Total Principal Balance for note is $28800.

Do I need to take into account interest? What about the actual amount paid?

[morgaine300]

The "current" portion is what is due. Current is anything due within one year, so when it was recorded, the first payment due within one year went into current. So that's the payment.

And yes you have to figure the interest. Since there isn't any other information stating otherwise, I'm assuming the annual payment is actually for a full year, so that you'd have a full year's worth of interest. It's also not stating exactly how the interest is due. Generally, all interest accrued would be paid - that would mean interest on the entire 28,800 loan, even though you're only paying 4800 of it. Because you've borrowed all 28,800. However, there are other ways to do interest, but it doesn't say anything. (This may be an assumption from how it's presented in the book.)

And total paid is the current plus the interest.

Can you go from there?