The notes receivable happen when one business, usually a bank, borrow or makes a loan to another business. Notes receivable income is recorded at the income statement as interest income.What is notes payable?This is a liability accountThe promise of the borrower to pay it's obligation is recordedA notes payable is consists of principal amount, due date and the interest to be paid.
If one company will borrow money to the other company such as bank, the bank will require the borrower to sign a formal loan agreement before they will release the money. The company will record the loan in its general ledger account as notes payable.
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In accounting, interest expense is the amount of money paid due to the interest of a borrowed resource (usually, money). As this is categorized as an expense, it will decrease the equity due to outflow of money. This will decrease the cash in assets and in effect, will also decrease the equity of the business.
The political ideology of the power-holders always conditions the economic system. The economic system has to work in the environment generated by political relations. Economics has to closely follow political relations, goals and policies which are studied by Political Science.