INTEREST PAYABLE. 



G55 



. The Interest Receivable and Interest Payable accounts are 

 " complicated affairs" that they are seldom used in business, unless one of 

 the partners wishes to withdraw from the business, or unless they wish 

 to take into the business a new partner, at which time they desire to 

 know the exact worth of the firm ; and in order to find this they must 

 ascertain how much interest is due to the firm on the notes on hand, and 

 how much interest is owing by the firm on the interest-bearing notes- 

 outstanding. The complication in these accounts arises in finding, at the 

 time the interest is paid for, what portion of the interest to enter to Inter- 

 est Receivable or Interest Payable, and what portion to the Interest proper 

 account; and in making entries to so many accounts, when it would be 

 entirely proper and much less work, to keep only one account instead of 

 the three, namely, " Interest," and make the entry to that account not 

 until the interest is paid for. 



INTEREST PAYABLE. 



161. Debit, when the accrued in- 

 terest is paid, which was credited on 

 the opposite side of this account. 



16O. Credit, at the end of th- 



year, for the accrued interest to date 

 on all the interest- bearing notes and 

 time-drafts we owe, i e., for the total 

 interest we owe to date on our Bills 

 Payable. 



Directions for closing tlie Interest Payable account at the end of 

 the year: 



1st. Find the difference between the two sides of this account, an 1 

 write on the debit side, in red ink, " To Balance" for amount of that dif- 



.-. Inch will make the account balance. 

 :!nd Rule the closing lines and write the total amounts between the 



:>nl Writ.- <>n ere lit side of this account, in black ink, below the clos- 

 ing lines, " By Balance" for amount of this difference, which dill'.-iv 

 l.alann- of interest wo owe for an 1 is payable by 



H>tt. KXI-I.AN ATION. At the end of each year, we compute the interest 



on all the inteivst-b'Tiriiii; Mills Payable we owe, from the dates of such 



a up to th.- rnd of the year, with sann- '-xe.-ptionsas in 158. We then 



lit "Interest Payable account " for t ho total amount o such int. 



due, and debit the interest account proper for the same amount. It will 



