Sarah borrowed $2,200 from Cassandra. Sarah promised in writing that she would repay the money to Cassandra on June 18, 201X. At the time of the loan, Sarah records the transaction as a(n):
A) Accounts Receivable.
B) Accounts Payable.
C) Note Payable.
D) Note Receivable.

Question

Quizplus · Accepted Answer

Since Sarah is the borrower, she has the obligation to repay the money, which is recorded as a Note Payable on her books. This reflects her written promise to pay back the loan to Cassandra by a specific date.

Sarah Borrowed $2,200 from Cassandra