![]() The amount borrowed is recorded by debiting Cash and crediting Notes Payable: The interest represents 8% of $10,000 for half of a year (January 1 through June 30). In the preceding note, Oliva has agreed to pay to BancZone $10,000 plus interest of $400 on June 30, 20X8. A correct legal form would typically be far more expansive and cover numerous things like what happens in the event of default, who pays legal fees if there is a dispute, requirements of demand and notice, and so forth. The preceding illustration should not be used as a model for constructing a legal document it is merely an abbreviated form to focus on the accounting issues. Chapter 24: Analytics for Managerial Decision Making. ![]()
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