October 30, 2016 admin

Notes Payable—Short Term—Other

Liabilities and Net Worth

NOTES PAYABLE—SHORT TERM—OTHER LIABILITY ACCOUNT
2030

ACCOUNT EXPLANATION
Principal amount of short term (maturing within twelve months) notes payable to finance institutions or other sources, including officers and partners.
TRANSACTIONS
  Jrnl. Dr. Cr.
  Note given to bank for loan payable in six months CR
    Cash in Bank—General 1001
      Notes Payable—Other—Short Term 2030
             
  Payment of principal and accrued interest on short term note CD
    Notes Payable—Other—Short Term 2030
    Accrued Interest 2421
      Cash in Bank—General 1001
             
  Purchase of shop equipment on notes, of twelve months or less, secured by chattel mortgage P
    Prepaid Interest 1520
    Parts & Service Equipment   1720
      Notes Payable—Other—Short Term     2030
COMMENTS
  • Subsidiary records should support this account.
  • At month end, a listing of outstanding notes should be prepared for management review and the balance reconciled to this account.
  • Interest expense on items in this account should be charged to Account 8740, Interest—Excluding Vehicle & Mortgage.
  • Interest accrued at month end on short term notes should be credited to Account 2421, Accrued Interest.
  • Short term notes payable secured by tractors and implements and short term notes payable to subsidiaries and affiliates should be included in this account.