The document provides examples of accounting entries for notes payable. It describes signing a 90-day, 6% note for $20,000 and the journal entries to record it. It then discusses paying the principal and interest of $20,300 for the note at maturity. Another example shows signing a 90-day, 12% note for $4,000 to extend an accounts payable and the entries to record it. Finally, it discusses paying $4,120 for the principal and interest of that note at maturity.

1. LESSON 20-2
Notes Payable
CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning

2. 2
SIGNING A NOTE PAYABLE
page 593
May 18. Signed a 90-day, 6% note, $20,000.00. Receipt No. 345.
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2
1.
2.
3.
4.
5.
3
4
5
Write the date.
Write the account title.
Write the receipt number.
Write the principle amount in the General Credit column.
Write the same amount in the Cash Debit column.
CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning
LESSON 20-2

3. 3
PAYING PRINCIPLE AND INTEREST ON A
page 594
NOTE PAYABLE
August 16. Paid cash for the maturity value of the May 18 note: principal,
$20,000.00, plus interest, $300.00; total, $20,300.00. Check No. 721.
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2.
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Write the date.
Write the account title.
Write the check
number. note’s
Write the
principal amount.
5. Write the account title.
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7
5
6. Write the interest
expense amount.
7. Write the amount
of cash paid.
CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning
LESSON 20-2

4. SIGNING A NOTE PAYABLE FOR AN
EXTENSION OF TIME
4
page 595
June 5. Restaurant Supply signed a 90-day, 12% note to Hayport
Company for an extension of time on its account payable,
$4,000.00. Memorandum No. 66.
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2
1. Debit to Accounts Payable
2. Credit to Notes Payable
CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning
LESSON 20-2

5. 5
PAYING A NOTE PAYABLE ISSUED FOR
AN EXTENSION OF TIME
page 596
September 3. Paid cash for the maturity value of the note payable
to Hayport Company: principal, $4,000.00, plus interest, $120.00;
total, $4,120.00. Check No. 722.
CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning
LESSON 20-2

6. 6
TERMS REVIEW
page 597
 current liabilities
 interest expense
CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning
LESSON 20-2

7. 6
TERMS REVIEW
page 597
 current liabilities
 interest expense
CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning
LESSON 20-2