A journal entry to record a payment on account will include:
1. the date of the transaction
2. the name of the payer and recipient (individuals or organizations)
3. an indication as to which side, if any, is being paid in full or partially; this may be shown by placing a “P” before one column and an “R” before another column
4. whether or not there are any accrued interest charges for that day’s transactions, also called carrying charges interest
This is an example: Date, Name of Payer and Recipient (individuals or organizations), Balance before the transaction, Date of next entry to record interest charges for this day’s transactions. MARCH 12, ABC Corporation, $1500; -$1500 = $14500 APRIL 15th – MONDAY Interest on account will be calculated from MARCH 13th through APRIL 14th at 45% per annum=90 days x .45/365)=$150.00 in carrying charges interest that must also be recorded in a journal entry for April 16th).
On April 15th there are no accrued interest charges because it is not yet April 16th when they would accrue.)