20 BULLETIN 811, U. S. DEPARTMENT OF AGRICULTURE. 
Patronage Dividend (F4). 
Debit: 
1. With the amount of the dividend 
when it is paid. 
Credit: 
1. With the dividend declaration when 
such dividend is based on the 
amount of business transacted. 
Debit Surplus.) 
Storage Liability (Fb). 
Debit: 
Credit: 
1. At the beginning of a fiscal period 
1. With the market value of stored 
the storage liability at the close of 
grain as shown by the balance 
the previous fiscal period. < v Credit 
sheet at the time of opening the 
Loss and Gain. 1 ) 
books. 
2. With the inventorv value of stored 
grain at the end of a fiscal period. 
Debit Loss and Gain.) 
In calculating the liability arising from storage tickets outstanding at the end of 
the year, the same price must be used as is used in computing the value of the inven- 
tory of grain on hand and in transit. 
Notes Receivable Discounted (F6). 
Debit: 
1. With the face value of notes receiv- 
able discounted which have been 
reported by the bankas having 
been paid by the signers. (The 
Xotes Receivable account is cred- 
ited at this time.) 
2. With any discounted note redeemed 
by the business. (In this case the 
Notes Receivable account is not 
affected as the note is still owned 
by the compamO 
Credit: 
1. With the face value of any notes re- 
ceivable discounted held by the 
bank as shown by the balance 
sheet at the time of opening the 
books. 
2. With the face value of all notes sub- 
sequently discounted. (Debit In- 
terest account with the amount of 
the discount and Cash account 
with the proceeds. 1 
Xotes received by the company, especially those received in payment for shares 
of stock, are frequently discounted at the bank. Such discounted notes represent a 
contingent liability, for if the makers refuse or are unable to pay, the company dis- 
counting them is liable to the bank for their payment. The credit balance of this 
account indicates the extent of this contingent liability. When all such notes are 
paid, the contingent liability will disappear from the books. Shares of stock for 
which notes are taken should be held as collateral to secure the payment of the notes. 
In case the note is past due and no notice of payment has been received, it may 
usually be taken for granted that the note has been paid. 
