In order to credit a customer in the account, a credit note must be issued. After that is done, a journal entry can be made to indicate the credit.
debit accounts payablecredit notes payable
Entry 1 [Debit] Cash xxxx [Credit] Bank xxxx Entry 2 [Debit] Bank xxxx [Credit] Notes payable xxxx
Depending on the credit terms, the accounts used may vary slightly but it is a basic entry. If the credit terms are where the account will be paid off in one year or less the accounts are: Account Receivable (debit) Revenue (credit) If the terms end up being more than one year then the only account that changes is the accounts receivable and you use Notes Receivable. Notes Receivable (debit) Revenue (credit) *note, some companies may list revenue as Sales, Sales Revenue, Income, etc. For general purposes Revenue is most commonly used. (GAAP)
In double-entry accounting it's the same basic entry for all liabilities, the accounts used will vary depending on the type of liability in which you may be referencing.I'll give a couple examples so that hopefully it will help. Company X purchases a computer on account, the amount the company owes is now a liability. To record this purchase a debit is made to Equipment and a credit is made to accounts (or notes) payable.Remember, all liabilities have a credit balance, therefore when entering a liability, there is a credit to the liability and a debit to another account.A company borrows money from a bank and signs a note, the debit is for the cash received and the credit is for the note payable (the liability)A company owes their employee's wages but does not intend to pay the wages until a later date, what they now owe is a liability. A debit to Wage Expense is made with a credit to Wages Payable.*note, a long term liability is still a liability, the difference between a long-term and a current liability is only the time in which the debt (or liability) will be fully paid off. The entry is the same for both.
Functions of credit note
[Debit] Goods purchased [Credit] notes payable / accounts payable
debit accounts payablecredit notes payable
Debit Purchases and Credit Supplier.
credit to interest receivable
Entry 1 [Debit] Cash xxxx [Credit] Bank xxxx Entry 2 [Debit] Bank xxxx [Credit] Notes payable xxxx
Depending on the credit terms, the accounts used may vary slightly but it is a basic entry. If the credit terms are where the account will be paid off in one year or less the accounts are: Account Receivable (debit) Revenue (credit) If the terms end up being more than one year then the only account that changes is the accounts receivable and you use Notes Receivable. Notes Receivable (debit) Revenue (credit) *note, some companies may list revenue as Sales, Sales Revenue, Income, etc. For general purposes Revenue is most commonly used. (GAAP)
[Debit] Accrued interest income [Credit] Notes payable
In double-entry accounting it's the same basic entry for all liabilities, the accounts used will vary depending on the type of liability in which you may be referencing.I'll give a couple examples so that hopefully it will help. Company X purchases a computer on account, the amount the company owes is now a liability. To record this purchase a debit is made to Equipment and a credit is made to accounts (or notes) payable.Remember, all liabilities have a credit balance, therefore when entering a liability, there is a credit to the liability and a debit to another account.A company borrows money from a bank and signs a note, the debit is for the cash received and the credit is for the note payable (the liability)A company owes their employee's wages but does not intend to pay the wages until a later date, what they now owe is a liability. A debit to Wage Expense is made with a credit to Wages Payable.*note, a long term liability is still a liability, the difference between a long-term and a current liability is only the time in which the debt (or liability) will be fully paid off. The entry is the same for both.
Functions of credit note
[Debit] Purchases xxxx [Credit] Cash/bank xxxx (For Down payment) [Credit] Notes Payable xxxx
A credit note is another name for and adjustment note
The best thing to fix your credit is to continue to pay your bills on time. In addition, keeping your balances low on current accounts. Diversify your credit, so to have a variety of credit accounts. Work with your creditors and the credit bureaus to remove any negative listings that are hurting your credit score.