Sir pls clarify doubts....

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retheesh (Querist)
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09 August 2015 what do you mean by 'long term note payable' how it affect...accounting equation eg.purchase land and a small office building. The land was worth rs.150,000 and the building worth rs.350,000. The purchase price was paid with rs.200,000 cash and a long term note payable for rs.800,000. what will be the journal entry for long term note payable.

Amol S Joglekar

Amol S Joglekar (Expert)
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09 August 2015 It denotes the interest agreed to be paid on the purchase of land along with building.

Price of Land and Building 500,000
Down payment made 200,000
Balance left 300,000 for which a note is signed to pay 800,000

01. Debit Land and Building 500,000,
Credit Cash 200,000
Credit XYZ, the seller 300,000

02. Debit Interest not accrued but agreed to be paid to XYZ 500,000
Credit XYZ

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Sir pls clarify doubts....

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