Bookkeeping

A) Johnny's corporation borrowed money and issued a note (in the amount of 10,000) to cover cash shortages during the slow season.

B) One month later, Johnny's has to account for the interest (in the amount of 900) on the note that has accrued.


A) 10,000 DEBIT Cash Account
10,000 CREDIT Notes Payable

B) 900 DEBIT Accrued Interest
900 CREDIT Notes Payable