The proper entry to make when a note is paid on the maturity date depends on whether the note is an interest-bearing or non-interest-bearing note.

Question

Quizplus · Accepted Answer

This statement is true. For an interest-bearing note, the amount of principal and interest is credited to the note payable account and the interest revenue account, respectively. For a non-interest-bearing note, only the principal amount is credited to the note payable account.

The Proper Entry to Make When a Note Is Paid