Shaylee,Inc.borrowed $62,000 from a bank,depositing those funds in its bank account and signing a formal agreement to repay the loan in two years.What is the correct journal entry for this transaction?
A)Debit notes payable and credit cash for $62,000
B)Debit notes payable and debit cash for $62,000
C)Credit notes payable and credit cash for $62,000
D)Debit cash and credit notes payable for $62,000

Question

Quizplus · Accepted Answer

Since cash (asset)is increased,it must be debited.Since notes payable (liability)is being increased,it must be credited.