314 Notes Payable

314 Notes Payable – Other

Liabilities

Notes Payable

Synopsis

Account 314 is established to record amounts owed on short term loans. Notes payable on Company Vehicles, Driver Training Units or other short term notes payable are to be placed in this account. This account is also used to reclassify the short term portions of long term obligations (principal payments due in the next 12 months).

Debits

Credits

Principal payments on loans

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
Current portion of long term notes payable, including mortgages (principal payments due within next 12 months)

Example 1

Record exchange of the floorplan on unit designated to be a permanent company for a note payable.

Journal: General Journal

Entry:

Debit

Credit

Account 310

Notes Payable - New Vehicles and Demonstrators

$25,492

Account 314

Notes Payable – Other

$25,492

Example 2

Payment of monthly payment on company vehicle loan.

Journal: Cash Disbursements

Entry:		Debit	Credit
Account 79*	Interest - Notes Payable (Other)	$131
Account 314	Notes Payable - Other	$662
Account 202	Cash In Bank		$793

Example 3

Periodic adjustment of short term portion of Notes Payable - Capital Loans based on loan amortization schedule.

Journal: Cash Disbursements

Entry:		Debit	Credit
Account 334	Notes Payable - Capital Loans	$1,456
Account 314	Notes Payable - Other		$1,456

Note:

* = Interest should be allowed across departments based on methods described in Distribution of Expenses section of this manual.

Comments

A credit balance represents the liability on the note.

Amortization schedules should be maintained to allocate the principal and interest payments for notes with blended periodic payments due.