A company uses $100,000 in cash to pay off $100,000 in notes payable.This would result in a:
A)$100,000 debit to Notes Payable and a $100,000 credit to Cash.
B)$100,000 credit to Cash and a $100,000 credit to Notes Payable.
C)$100,000 debit to Cash and a $100,000 credit to Notes Payable.
D)$100,000 debit to Cash and a $100,000 debit to Notes Payable.

Question

Quizplus · Accepted Answer

Both accounts decrease.Cash is an asset account and Notes Payable is a liability account.The journal entry would include a debit to Notes Payable and a credit to Cash and for $100,000.

A Company Uses $100,000 in Cash to Pay Off $100,000