648 THE HOME, FARM AND BUSINESS CYCLOPAEDIA. 



Receivable for the new note received, and crediting Bills Receivable for 

 the old note surrendered. The first and second methods are the most 

 common in use, and are therefore recommended. 



125. When we get a note discounted in the bank, the note is paid so 

 far as we are concerned, so we must credit " Bills Receivable " for the full 

 face^of the note on the debit side of the Cash Book, and debit " Interest " 

 on the opposite side of the Cash Book for the amount of the discount. 

 (See 489 and 509 ; also 153.) If, on the other hand, the note is drawing 

 interest, the rate per cent, of which is satisfactory to the bank, and some 

 interest has already accrued at the time we get the note discounted, the 

 bank then pays us the full face of the note plus the accrued interest ; we 

 then credit " Bills Receivable " for the face of the note, and " Interest " for 

 the amount received for accrued interest. (See 495 and 496.) 



126. If, after our having a note discounted in the bank, the maker 

 should fail to pay when it becomes due, we are then obliged to " take up 

 the note," i. e., give the bank a check or the money for the face of the 

 note and the interest accrued to date, when the note again becomes our 

 property ; therefore we debit " Bills Receivable Account " for the face of 

 the note, and " Interest Account " for the accrued interest. This note be- 

 ing now called a "past-due note." 



127. When a note is received, which was made by one party payable 

 to another and endorsed over to us, care should be taken to see whether 

 there are any payments endorsed on the note ; for, of course, a note is 

 worth only its face less the payments, if any have been made. 



128. As the difference between the two sides of the Bills Receivable 

 account should at any and all times exactly agree with the total value of 

 the notes we have on hand, the book-keeper should take the notes as often 

 as once a month, put down the value of each on a piece of paper, and 

 afterward find the total of these amounts to see whether it agrees with 

 the amount required by the Bills Receivable account. As much responsi- 

 bility rests upon the book-keeper in having the notes on hand agree with 

 the Bills Receivable account, as does in having the cash on hand agree 

 with the Cash Book ; for, if the notes on hand do not agree with the Bills 

 Receivable account, it shows " there is a nut loose somewhere." When 

 we post an amount to the Bills Receivable account, we write in the 

 planation column the name of the maker of the note ; the date and the 

 time may also be added in the explanation, so that if there be a mistake 

 on the account we may check off from the credit side to the debit the 

 notes that have been paid, and in this way ascertain where the mistake is. 



