June 4th: Bought supplies from Home Hardware on account for $350.
- Debit of $350 to supplies
- Credit $350 to accounts payable
June 9th: Payed Home Hardware on account for $380.
THEREFORE, we're paying back MORE than we owe, so what account do I assign the extra $30? Is it a drawings account?
They might have other invoices on their account
Supplies 350 DR
Accounts payable 350 CR
Accounts payable 380 DR
Cash 380 CR
fyi: drawing accounts are when owners take money out of the business
#2 interest would not be charged after only a few days
db accts payable - HH $350
db - any asset account .... but probably prepaid supplies ... or Cash On Account at HH .. or Refund due ...$30
cr - cash $380
"To record payment and error made by dumb bookkeeper / dumb error made by bookkeeper" - lol
Interest expense 30.
Honestly, I'm not entirely unconvinced it wasn't a typo, but assuming the problem is error free, interest on the debt is the logical solution
supplies will have a credit
