28. Bills Payable Account.
Make this account debtor for all of our own notes and acceptances received (back) by our business, and creditor for all of our own notes and acceptances given by our business.
We give them on account or for something we buy ; and we receive them back when they are paid or otherwise redeemed.
The first entry in this account is made on the creditor side, and the difference (if any) between the two sides must always be a creditor balance, and therefore a liability. This balance is the amount of our own notes and acceptances outstanding. .
EXERCISES ON BILLS PAYABLE ACCOUNT
Exercise No. 13.
Make a copy of the foregoing note and acceptance. Journalize ; post Bills Payable Account, leaving room to continue with Ex. No. 14. What amount of our notes was given out (issued)? What amount was received back (redeemed) ? What amount is still outstanding or unpaid ? Is this balance an asset or a liability ?
Woodstock, March 1, 19-. Gave our note for $100 to K. Spiers, Hamilton, on account. 4. Gave our note for $200 to J. Robb for Mdse.
8. Bought Mdse. $150 and gave our note in payment.
18. Received (back) our note of Mar. 4, $200 ; we paid it in cash. 20. Gave our note for $175 to B. Smith on account.
23. Paid our note of Mar. 8 in cash, $150. (Received it back.) 27. Bought Mdse. $225.50 on our note.
30. Paid our note of Mar. 20 in cash, $175.