Ajmal LLC purchased goods worth OMR 8,500 from Safer & Co. on January 12, 2021.

Ajmal LLC
could not repay it within the credit period of 30 days. Therefore, on February 12, 2021 Safer &
Co. accepted OMR 3500 cash and a 60-day, 8% notes payable for the remaining amount. The
journal entry to record the above on February 12, 2021 in the Books of Ajmal LLC INCLUDES;

Books of Ajmal LLC

Feb 12 Accounts Payable a/c Dr 8500

To Cash a/c 3500
To Notes Payable a/c 5000
(Accounts payable of OMR 8500 is being
settled with OMR 3500 cash and OMR
5000 notes payable)

The journal entry to record the payment of note on due date (April 13, 2021) in the Books of
Ajmal LLC INCLUDES; (Consider 365 days in year & Assume the accounting year is January to
December)

April 13 Notes Payable a/c 5000

Interest Expenses 65.750
To Cash a/c 5065.750
(Accounts payable of OMR 8500 is being
settled with OMR 3500 cash and OMR
5000 notes payable)
Calculation Interest for 60 days
5000x8% (60/365) = 65.750

Assume the accounting year ends on 31 March 2021. The journal entry to record the interest
due on 31 March, 2021 in the Books of Ajmal LLC INCLUDES; (Consider 365 days in year)

Interest due

No. of days? = February 28 – 12 = 16 days

March = 31 days

= 47 days in the accounting year 2020-21

Interest Payable 5000 x 8% (47/365) = 51.500

Adjustment Entry for Interest payable

31 March Interest Expenses a/c Dr. 51.500

Interest Payable a/c 51.500
Assume the accounting year ends on 31 March 2021. The journal entry to record the payment of
notes on April 13, 2021 in the Books of Ajmal LLC INCLUDES; (Consider 365 days in year)

April 13 Notes Payable a/c Dr 5000

Interest Expenses (from 1 to 13 April) 14.250
Interest Payable (last year interest) 51.500
To Cash a/c 5065.750

Interest Expenses 5000 x 8% (13/365) = 14.250

Aseela Establishment borrowed OMR 3,000 from Bank Dhofar by signing a notes payable on 90-
day, 10% interest. On the day of borrowing the journal entry in the books of Aseela
Establishment INCLUDES; (Consider 360 days in a year)

Borrowing day Cash a/c Dr 3000

Notes Payable a/c 3000

On the day of repayment the journal entry in the books of Aseela Establishment INCLUDES;
(Consider 360 days in a year)

Repayment day Notes Payable a/c Dr. 3000

Interest Expenses a/c Dr. 75
To Cash a/c 3075

Interest Expenses 3000 x 10% (90/360) = 75