lezione accounting
chap 9
E- NOTES PAYABLES
notes payable are written promises (contracts) to pay a stated sum at one or more specific
future dates, called maturity date, to a financial institution (es: bank)
A note payable contract specifies also the amount borrowed, and the interest associated
with the borrowing
notes payable: contracts signed usually with a financial institution (but can be granted to
anyone) to get money as a loan for a specific period of time
the maturity date: date in which the loan/liability expires, liabilities included in the notes
payale are always financial so assumed to be interest bearing. they can be formally non
interest bearing but we need to consider the mkt int rate
if not specified differently, the int rate associated with the borrowing is annual, so 6% note
means 6% is over one year, if we need to divide the int expense over one year we divide per
12 month, and not the compound int rate (quindi int rate/12)
On october 1st, 2019 mercury Ltd issues a 1st year note, 10 000 dollars principal, at 6% int
rate
