At the end of the third month, Interest Payable is up to $1,500, at which point you pay the interest, debit the account for $1,500, and reduce the debt to zero.

To calculate the total interest liability you need three numbers: the principal, the interest rate, and the time period. For example, let's say your note carries principal of $5,000 at an annual ...

The debtor would debit notes payable for $100,000, credit land for $75,000 and credit an extraordinary gain for $25,000. A debtor can also settle a note by transferring equity -- common or ...