=91. When a Note Drawing Interest is Paid.= But suppose Samuel Smart's note is $100.00 for 30 days, with 6% interest, and that the note is kept by us and the money is paid directly to us when due. We shall then receive the interest, in addition to the face of the note, making a total of $100.50. The entry would then be made in the cash book on the debit side, and would be: Bills Receivable $100.00 Interest and Discount .50 Samuel Smart's note due Oct. 10, paid to-day. =92. When a Discounted Note is Not Paid.= When we discounted Samuel Smart's note of $100.00 for 30 days without interest at the bank, we were obliged to endorse it, which had the effect of a guarantee of payment. If not paid when due, the amount would be charged to our account at the bank. The note would again come into our possession, and the amount must be debited to some account, the credit being to the bank. We have previously credited the amount to bills discounted, and our entry is: Bills Discounted $100.00 Bank $100.00 Samuel Smart's note not paid at maturity. But suppose the transaction to have been the one described in Article 90. The note returned to us is $2,010.00, that being the amount of principal and interest. Our bills receivable and bills discounted accounts show the item as $2,000.00 only. Therefore we must include the $10.00 in our adjusting entries which will be: Bills Receivable $10.00 Interest added to Smart's note not paid when due Bills Discounted $2,000.00 Bank $2,010.00 Smart's note not paid at maturity. =93. When a Note is Past Due.= The above entries leave this unpaid item in the bills receivable account. If the business is one in which a large number of bills are discounted, it will be advantageous to show past due bills receivable by themselves, leaving bills receivable account to represent only paper not due. The entry for a bill unpaid at maturity would be: Bills Receivable Past Due $2,010.00 Bills Receivable $2,010.00 Smart's note past due. =94. When a Note is Renewed.= We shall now suppose that Samuel Smart finds that he will be unable to pay his note when due. He comes to us and offers a new note for 30 days, which we accept. He prefers to add the interest due on the original note to the principal, and makes his note for $100.50. We then return the original note and the entry is: Bills Receivable $100.50 Interest and Discount .50 Bills Receivable $100.00 New note given by Samuel Smart to cover note due Oct. 10, with interest.