Taylor Bank lends Guarantee Company $150,000 on January 1.Guarantee Company signs a $150,000,8%,9- month note.The entry made by Guarantee Company on January 1 to record the proceeds and issuance of the note is

Question

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Guarantee Company is receiving cash proceeds of $150,000 from Taylor Bank, and at the same time, issuing a note payable for $150,000. Therefore, the entry to be made by Guarantee Company on January 1 will be to debit cash for $150,000 and credit notes payable for $150,000. This is reflected in option B.

Taylor Bank Lends Guarantee Company $150,000 on January 1