Bondi Bank agrees to lend Tawonga Construction Company Ltd $200,000 on 1 January. Tawonga Construction Company Ltd signs a $200,000, 4%, 9-month note.
-The entry made by Tawonga Construction Company Ltd on 1 January to record the proceeds and issue of the note is:

Question

Quizplus · Accepted Answer

A debit entry is made to cash to record the proceeds received from the bank and a credit entry is made to Notes payable to record the liability to the bank. The amount is for the value of the loan. No interest is payable on the day of issue.

Bondi Bank Agrees to Lend Tawonga Construction Company Ltd $200,000