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.

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 ...

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 ...

3. Calculate interest for the entire period Finally, to get the full cost you need to multiply the annual charge by the number of years specified in the promissory note.