IBM signs an agreement to lend one of its customers $200,000 to be paid back in one year at 5.5% interest.IBM would record this loan under:

Question

Quizplus · Accepted Answer

The loan given by IBM to its customer is a note receivable, as it is a formal written agreement between the two parties for the customer to repay the borrowed amount with interest. Loans payable would be used if IBM was the borrower, while accounts and unearned revenue are both related to income or revenue recognition and do not apply to this scenario.

IBM Signs an Agreement to Lend One of Its Customers