CLASSIFICATION OF LEDGER ACCOUNTS FOR CREAMERIES. 15 
COLLECTIONS ON Notes Discountep (F 5). 
DEBIT: CREDIT: 
1. With the amount paid to the bank 1. At the end of the period with the 
to liquidate Notes Receivable total amount deducted from pa- 
Discounted. trons’ vouchers applying on Notes 
Receivable which have been 
discounted. 
In organizing a new association, notes are frequently accepted in payment for 
subscription to capital stock, and then discounted at the bank, the proceeds being 
used for the purchase of necessary equipment. In payment of these notes a certain 
amount is deducted from the patrons’ vouchers each period, and these collections 
should be paid to the bank to apply on patrons’ notes receivable which have been 
discounted. In such cases the following Journal entry should be made: 
DEBIT. CREDIT. 
$100 Collections on Notes Discounted. 
IBY S82 e/a (51 reece eet aie em ig fa epee $100 
(For payment to Blank Bank of collections received to 
date on patrons’ notes discounted.) 
It will be evident that when the total of the paymerts to the bank for patrons’ notes 
previously discounted equals the total of the face value of such notes, this liability 
will have been liquidated and the canceled notes should be returned to the organiza- 
tion or to the various makers. At this time an entry should be made debiting Notes 
Receivable Discounted and crediting Notes Receivable. 
Such creameries deduct a certain fixed amount per pound on products delivered by 
the patrons during the period, the amount so deducted being apphed on the payment 
of the notes. It is preferable to make this deduction in even dollars—$1, $3, ete. 
Accounts PAYABLE Hauters (F 68). 
DEBIT: | CrEpIr: 
1. With the amount paid haulers. 1. With the amount due haulers as 
shown by the Balance Sheet at 
the time of opening the books. 
2. With the amount due haulers for 
Services during the period. 
(This amount is deducted from the 
patrons’ vouchers.) 
Tn some creameries the patrons employ haulers to deliver their product, the cream- 
ery paying the hauler, and later this payment is deducted on the patrons’ vouchers. 
Such disbursements do not constitute an operating expense to the organization. When 
the creamery makes no charge to the patrons the hauling becomes an operating expense 
and should be handled as any other expense account. (See p. 26.) 
