财务会计英语unit3

Notes Receivable 550
Interest Income 13.75
On Dickson Hunter’s book the entry was:
May 10
Notes Payable 550
Interest Expense 13.75
Cash
563.75
Section 1 Current Liabilities
Purchase 1000 Accounts Payable 1000
April 28 Purchase 2000 Accounts Payable 2000
Section 1 Current Liabilities
• 1.2 Notes payable Notes payable are of both short and long terms. Short-term notes payable are obligations represented by promissory notes.
Section 1 Current Liabilities
Example 3.2 Another example would be about purchase. Assume that on April 4 and 28 Whitman Company purchased merchandise from as in Corp. on account for $1,000 and $2,000 respectively. The two separate journal entries would be: April 4
Unit 3
Liabilities
Financial Accounting English (Second Edition)
Contents
Section 1 Current Liabilities Section 2 Non-current Liabilities
Section 1 Current Liabilities
Example 3.4
Assume that on December 1 Zimer Company borrowed $3,000 for 60 days at 14%from the Commercial Bank.
The bank deducted the interest ($70[3]) from the $3,000 principal and gave the difference of $2,930 to Zimer Company. The journal entry of Zimer Company was:
Notes Payable 550 Accounts Payable 550
Section 1 Current Liabilities
Then on May 10 when the note was due, in Lott’s book
the entry was:
May 10
Cash 563.75
Section 1 Current Liabilities
• 1.4 Interest payable (应付利息) Example 3.5 Continuing with Example 3.4, on December 31, the end of the accounting period, Zimer adjusted its interest expense. The journal entry was: Interest Expense 35 Interest Payable 35 The Interest Expense of $35 was calculated: $3,000 ×30/360 ×14%
• 1.1 Accounts Payable Accounts payable are amounts owed to suppliers. They are incurred when purchase occurs. Example 3.1 To illustrate, let’s refer to the information in Example 2.7. In the book of Lott Law Firm, there was a debit entry of $550 in Accounts Receivable, but in Dickson Hunter’s book the entry would be: Legal Consultancy Services 550 Other Accounts Payable 550
($3,000). The entry to record the payment of
the note would then be:
wk.baidu.com
Notes Payable 3000
Cash
3000
Section 1 Current Liabilities
• 1.3 Accrued liabilities (应计负债) This kind of liabilities is not already in the accounting records but is incurred in the current period, regardless of when they are paid.
Section 1 Current Liabilities
Example 3.3 Let’s take Example 2.14 for illustration. When Dickson Hunter issued the note to Ted Lott, he stated clearly in the note the period of time and rate of interest, and in his book he would make the following entry: Feb. 8
Cash
2930
Interest Expense 70
Notes Payable
3000
Section 1 Current Liabilities
60 days later when the note was due, Zimer
Company sent a check for the face of the note