October 30, 2016 admin

Notes Payable—Long Term—Current Portion

Liabilities and Net Worth

NOTES PAYABLE—LONG TERM—CURRENT PORTION LIABILITY ACCOUNT
2040

ACCOUNT EXPLANATION
Principal amounts of long term notes or mortgages payable to finance institutions or other sources, including officers, partners, etc., maturing within twelve months.
TRANSACTIONS
  Jrnl. Dr. Cr.
  Reclassification of portion of mortgage due within twelve months to current liability account G
    Mortgages Payable 2500
      Notes Payable—Long Term—Current Portion 2040
             
  Regular payment on principal of mortgage CD
    Mortgages Payable 2500
      Cash in Bank—General 1001
COMMENTS
  • Subsidiary records should support this account.
  • At month end, a listing of the current amounts on each long-term loan should be prepared and the total reconciled with the balance in this account.
  • The liability for interest on notes payable should be recorded in Account 2421, Accrued Interest.
  • Payments of principal amounts of long term notes or mortgages payable should not be charged to this account until the long term portion has been paid off.