What Is an Interest Bearing Note?

Interest bearing note (Interest bearing note) means that when a commercial bill of exchange is due, the acceptor shall pay the face value and the interest rate specified in the note in addition to the face value of the note, in addition to the face value of the note, from the effective date of the note Notes with interest up to the maturity date of the note.

Interest-bearing notes

Right!

Interest

Interest-bearing notes are often marked with certain

Interest expenses should be recorded in the "financial expenses" account.

Borrowing: financial expenses ×××

Loan: Notes payable ×××

If the amount of interest is not large and whether the accrual will not have a significant impact on the accounting statements, it can be included in the financial expense at one time when the notes are due to return the principal and interest is paid.

On December 20, 2005, an enterprise discounted an interest-bearing bank acceptance bill with a face value of 2 million yuan and an interest rate of 2.16%. The bill was issued on October 21, 2005, with a prescribed period of 90 days, and the bank that opened the account discounted it at a discount rate of 2.475%. The corporate account shows a cash discount of 1995852.72 yuan. After auditing, there was no relevant original certificate issued by the bank in the attachment to the bookkeeping certificate. The entry made by the enterprise on December 20, 2005 is:

Borrow: bank deposit 1995852.72

Finance costs 4147.28

Credit: Notes receivable 2000000

After the corresponding bill collection test, the audit team made such a record in the audit working paper: after investigation, an enterprise held one interest-bearing bill receivable in December 2005, which was a bank acceptance bill. The ticket issuance date is October 21, 2005, and the term of the note is 90 days. According to calculations, the maturity date of the bills should be January 19, 2006, and the enterprises will hold the bills to the bank and discount them on February 20, 2005. As of the discount date, the company has held the bills for 60 days, and the discount days are 30 days.

The audit calculation of the discounted bills is:

Expiry value = 2000000 + 2000000 × 2.16% × 90/360 = 2010800 (yuan)

Discount interest = 2010800 × 2.475% × 30/360 = 4147.28 (yuan)

Cash discount = 2010800-4147.28 = 2006652.72 (yuan)

This calculation result is very different from the company's book records. Because the company did not withdraw interest on the interest-bearing notes receivables during the accounting period, the audit believed that the correct accounting entry for the previous year should be:

Borrow: bank deposit 2006652.72

Credit: Notes receivable 2000000

Finance expenses 6652.72

The second paragraph of Article 18 of the "Accounting System for Enterprises" stipulates: "The interest receivables shall be calculated at the end of the period based on the principal (or face value) and the determined interest rate. The income is included in the current profit and loss. "On October 31 and November 30, 2005, the enterprise shall withdraw the interest on the" notes receivable "and record it.

Entries for October 31, 2005 should be

Borrowing: notes receivable 1200 (2000000 × 2.16% × 10/360)

Loan: Finance costs 1200

Entries for November 30, 2005 should be

Borrow: Notes receivable 3600 (2000000 × 2.16% × 30/360)

Loan: Finance costs 3600

When discounted on December 20, 2005, an entry should be made as

Borrow: bank deposit 2006652.72

Credit: Notes Receivable 2004800

Finance costs 1852.72

This business caused the company to deduct financial expenses of RMB 6,672.72 in the previous year, and the company mistakenly recorded it as a debit of RMB 4,147.28, which was more than RMB 10,800 (6652.72 + 4147.28), which is exactly the amount of the business from the date of issue The total interest amount (2000000 × 2.16% × 90/360) from January 21 to January 19, 2006 shall be adjusted.

The audit team checked the account with the bank that opened the account. The statement provided by the bank showed that on December 20, 2005, the company had an income of RMB 2006652.72, and no record of revenue of RMB 1995852.72 was found. According to the bill discount voucher provided by the bank that opened the account, the corporate discount amount was 2006652.72 yuan. On the contrary, the accounting personnel responsible for the bill discount business of the enterprise cannot provide the accounting basis for the discounted amount of 1995852.72 yuan in the December 2003 voucher of the enterprise. By further collecting evidence to prove that the accounting personnel responsible for the discounted bills business of the enterprise have used the methods of making books without attaching original vouchers, altering, and adjusting the "Bank Deposit Balance Reconciliation Statement" and other methods, the bill discounting interest has been corrupted. Based on this, the audit recommended that the enterprise adjust the relevant accounting accounts and further hold the relevant personnel accountable. Since the financial expenses have been deducted from the total profit of the previous year as period expenses, the "financial expenses" account cannot be adjusted again this year, and can only be adjusted through the "previous year profit and loss adjustment" account.

The adjusted entry for 2006 should be:

Borrow: other receivables-accounting × × 10800

Loan: Previous year profit and loss adjustment: 10800

Upon receipt of accounting ×× repayment

Borrow: cash or bank deposit 10800

Loan: other receivables-accounting × × 10800

At the same time, the income tax paid for increasing profits (the income tax rate enforced by the enterprise is 33%) should be paid 3564 yuan (10800 × 33%). The entry is:

Borrow: previous year profit and loss adjustment 3564

Loan: Tax payable-income tax payable 3564

According to corporate profit distribution procedures, statutory surplus reserve funds must be withdrawn at 10% of net profit and public welfare funds at 5% of net profit. The statutory surplus reserve to be supplemented is 723.6 yuan [(10800-3564) × 10%], and the public welfare fund to be supplemented is 361.8 yuan [(10800-3564) × 5%].