Notes Payable—Officers & Owners – Ford Online Accounting Manual

Liabilities and Net Worth

NOTES PAYABLE—OFFICERS & OWNERS	LIABILITY ACCOUNT
	2510

Principal amount due to officers, stockholders and owners of the dealership on long term notes.

			Jrnl.	Dr.	Cr.

Loan from officer of dealership and dealership note issued			CR
	Cash in Bank—General			1001
		Notes Payable—Officers & Owners			2510

Check issued in payment of above note and accrued interest			CD
	Notes Payable—Officers & Owners			2510
	Accrued Interest			2421
		Cash in Bank—General			1001

Subsidiary records should support this account.
Interest not paid on a monthly basis should be accrued monthly as a debit to Account 8740, Interest—Excluding Vehicle & Mortgage, and a credit to Account 2421, Accrued Interest.
The portion of notes payable to officers and owners that becomes payable within twelve months should be recorded in Account 2040, Notes Payable—Long Term—Current Portion. Payments of principal amounts of notes payable to officers and owners should be charged to Account 2510 until the long term portion has been paid.