I have a Accounting question about Notes Payable?

Question

The question says:
you borrow $2500 from the bank, signing a one year, 6% note payable.

I debit Cash for $2500 and credit notes payable for $2500?

I guess im not sure where the 6% comes in, and my book is no help.

Answer 1

Debit Cash for $2500 and credit notes payable for $2500 is correct. Assuming you borrowed this amount on Jan 1 and you made the above entry. On Jan 31, your entry:
Dr Interest expense 12.50 ($150/12)
Cr Interest payable 12.50

and you make the same entry at the end of every month thereafter. At the end of 12 months, you would have done this 12 times and your total for each of the interest expense and interest payable a/cs would be $150 (6% of $2500). When you pay the bank the note principal plus interest, your entry:
Dr Interest payable 150
Dr Notes payable 2500
Cr Cash 2650

Answer 2

"I debit Cash for $2500 and credit notes payable for $2500?"

This is correct for the initial journal entry. The 6% is the interest expense you will owe at the end of the note.

You would record this expense monthly (debiting interest expense, and crediting accrued interest - or the note itsefl)

Answer 3

When the money is borrowed:

dr cash 2,500.
cr note payable 2,500.

When the note is due in one year, calculate the interest:

(2,500.)(1.06) = 2,650.

So:

dr note payable 2,500.
dr interest expense 150.
cr cash 2,650.

Answer 4

in the end , the accountant will calculated the interest expense and record:
Dr interest expense
Cr interest payable