Fixed Asset Purchases With Note Payable

A business purchases land and buildings for 650, and pays 350 in cash and issues a 5% note payable for the balance of 300, which is secured by a mortgage on the property. The journal entry to record the initial purchase of the property using a combination of cash and notes payable is as follows:

Last modified November 19th, 2019 by Michael Brown
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Non Interest Bearing Note

A non interest bearing note or zero interest note does not have an interest rate and does not charge periodic interest payments on the outstanding liability. In order for the lender to get a return on the non interest bearing notes payable, they are issued at a discount to their face value.

Last modified November 27th, 2019 by Michael Brown
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Installment Notes

Installment notes are liabilities and represent amounts owed by a business to a third party. What distinguishes installment notes from other liabilities is that they are issued as a promissory note and repaid by fixed periodic payments.

With a promissory note, the business who issued the note (called the issuer) promises in writing, to pay an amount of money (principal and interest) to a third party (called the payee) at a given time or on demand.

Last modified December 12th, 2022 by Michael Brown
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Notes Payable Accounting

Notes payable are liabilities and represent amounts owed by a business to a third party. What distinguishes notes payable from other liabilities is that they are issued as a promissory note.

With a promissory note, the business who issued the note (called the issuer) promises in writing, to pay an amount of money (principal and interest) to a third party (called the payee) at a given time or on demand.

Last modified October 12th, 2022 by Michael Brown
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