On September 1,2013,Sharp Corp.lent $2,400 to Marla Smith on a 6-month 8% promissory note.The journal entry to record the note for Sharp Corp.would be to:

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When a company lends money to a person or another company, it creates a promissory note that states the terms of the loan, including the amount borrowed, the interest rate, and the repayment period. In this scenario, Sharp Corp. lent $2,400 to Marla Smith on a 6-month 8% promissory note, which means that Marla Smith will repay the $2,400 plus $96 of interest (8% of $2,400) in six months.

The journal entry to record the note for Sharp Corp. would be to debit Note Receivable/M Smith, $2,400, and credit Cash, $2,400. This entry records the increase in the Note Receivable account, which represents the amount of money that Sharp Corp. expects to receive from Marla Smith in the future, and the decrease in the Cash account, which represents the money that Sharp Corp. gave to Marla Smith at the time of borrowing. The entry does not record the interest income because the interest will be earned over the six-month period and will be recognized at the end of the term when the note is repaid.