274 FARM ACCOUNTING 



land as shown by the Land account at the beginning of the 

 year under review. 



The amount of interest on each area of land on the farm 

 is calculated at 4% l for the year. The entries are then 

 made on a basis of the amounts so calculated. The field 

 accounts are charged, each with its amount ; tin- Ilmix,-. 

 hold or Garden is charged with the inn -n->t on the area 

 occupied by the garden and house yard; and GeiKral 

 Expense is charged with the amount calculated for tli<> 

 barnyard area. In addition to these charges, Swino 

 are charged with the interest on the hog lot, Orchard 

 and Timber accounts respectively are charged with inter- 

 est on the tracts of land occupied by them, and any other 

 farm elements having exclusive use of a particular area of 

 importance are charged with interest on the areas so used. 



Interest on the barnyard area is charged to General 

 Expense because the latter account is ultimately distrib- 

 uted over the productive elements of the farm. It is con- 

 sidered, for this purpose, that the barnyard is for the 

 general benefit of all farming operations. 



Interest on an area used by cattle or sheep as pasture 

 is not charged to the cattle or sheep direct. It is charged 

 to the pasture, such charge being absorbed by the cattle 

 or sheep later, when they are charged with a certain 

 amount per pasture day as explained under " Pasture. " : 

 The hog lot could be treated in this way instead of the way 

 suggested above. 



Interest on Buildings. The principles governing the 

 calculation of interest on land apply also to interest on 

 buildings. Such interest is credited to Interest on In- 

 vestment, and charged to Building Expense. The latter 

 account is closed into the accounts of the farm elements 

 for the benefit of which the buildings are used, 



1 See Appendix, 

 Page 257, 



