LeBlanc Corp.signed a document promising to pay First Bank a specified amount of money at a definite future date at a certain interest rate.This transaction is reported as a(n)
A)note receivable on LeBlanc's books and a note payable on First Bank's books.
B)note payable on LeBlanc's books and a note receivable on First Bank's books.
C)account receivable on LeBlanc's books and an account payable on First Bank's books.
D)account payable on LeBlanc's books and an account receivable on First Bank's books.

Question

Quizplus · Accepted Answer

LeBlanc Corp. is the borrower, so the promise to pay represents a liability for them, recorded as a note payable. First Bank is the lender, so the promise to receive payment is an asset for them, recorded as a note receivable.