October 30, 2016 admin

Accrued Interest

Liabilities and Net Worth

ACCRUED INTEREST LIABILITY ACCOUNT
2421

ACCOUNT EXPLANATION
Interest accrued on interest-bearing obligations of the dealership.
TRANSACTIONS
  Jrnl. Dr. Cr.
  Monthly accrual of interest on mortgage SE
    Interest—Mortgage 8320
      Accrued Interest 2421
             
  Monthly accrual of interest on new vehicles floor planned SE
    Interest—Floor Plan—New 7180
      Accrued Interest 2421
             
  Payment of accrued interest CD
    Accrued Interest 2421
      Cash in Bank—General 1001
COMMENTS
  • A subsidiary record such as Form FMC 61, Prepaid and Accrued Expense Schedule, should support this account and should be used in computing monthly accruals.
  • Tax counsel should be obtained relative to the timing of payments of accrued interest to officers and owners at year end.