314 Notes Payable

314 Notes Payable – Other

Liabilities

Notes Payable

Synopsis

Account 314 is established to record amounts paid or payable on short term loans. Credit lines to floor Company Vehicles, Driver Training cars or to finance other notes payable within the next 12 months are typical of Notes Payable covered by this account.

Debits

Credits

Prepaid interest
Payments made

Notes payable on driver training vehicles
Notes payable on permanent company vehicles
Other notes payable due within 12 months from the current operating report date
Portion of long term notes payable, including mortgages, due within 12 months
Expired portion of prepaid interest

Example 1

Record twelve months of principal payments of a $41,666 loan that is to be paid by monthly installments over a term of 3 years.

Journal: General Journal

Entry:		Debit	Credit
Account 334	Long Term Debt	$41,666
Account 314	Notes Payable – Other		$41,666

Example 3

Record the amount of the real estate mortgage that is due within the next twelve months in the amount of $455,683.

Journal: General Journal

Entry:		Debit	Credit
Account 335	Mortgages Payable – Real Estate	$455,683
Account 314	Notes Payable – Other		$455,683

Comments

A credit balance represents the amount owed on notes secured by driver training and permanent company vehicles and on notes not otherwise provided for.

Note:

The amount of notes due beyond the next 12 month period is recorded in Account 334, Long Term Debt. In the case of Real Estate Mortgages, the long term portion (beyond 12 months) is recorded in Account 335, Mortgages Payable – Real Estate.