PA10. LO 4.3Prepare journal entries to record the following transactions. Create a T-account for Interest Payable, post any entries that affect the account, and tally the ending balance for the account (assume Interest Payable beginning balance of $2,500). March 1, paid interest due on note, $2,500 December 31, interest accrued on note payable, $4,250
Bad Debts
At the end of the accounting period, a financial statement is prepared by every company, then at that time while preparing the financial statement, the company determines among its total receivable amount how much portion of receivables is collected by the company during that accounting period.
Accounts Receivable
The word “account receivable” means the payment is yet to be made for the work that is already done. Generally, each and every business sells its goods and services either in cash or in credit. So, when the goods are sold on credit account receivable arise which means the company is going to get the payment from its customer to whom the goods are sold on credit. Usually, the credit period may be for a very short period of time and in some rare cases it takes a year.
PA10.
LO 4.3Prepare
- March 1, paid interest due on note, $2,500
- December 31, interest accrued on note payable, $4,250
Interest expense indicates the payment of additional amount on the principle of borrowings which requires to be paid in prescribed intervals.
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