Notes payable journal entry will journize the journal entry to record an installment note. We will enter the accounting transaction into a general journal and then post the transaction to a worksheet so we can see the impact on individual accounts and the accounting equation. The transaction to record a loan is surprisingly simple, but can be confusing because of the added information we have which is not needed for the initial journal entry. For example, we we will often know the interest rates and installment payment amounts but the interest rate is not needed for the initial recording of the financial transaction. Interest in not recorded at the start of the note because no time has passed. Interest is like rent owned on purchasing power of money. At the time we take out a loan no rent or time or interest has accumulated.
For more accounting information see website.
http://accountinginstruction.info/