Brian Inc.borrowed $8,000 from First Bank and signed a promissory note.What entry should Brian Inc.record?
A)Debit Cash,$8,000;Credit Notes Receivable,$8,000.
B)Debit Notes Receivable,$8,000;Credit Cash,$8,000.
C)Debit Cash,$8,000;Credit Notes Payable,$8,000.

Question

Quizplus · Accepted Answer

When a company borrows money and signs a promissory note, it receives cash, which increases its assets. This is recorded by debiting Cash. The obligation to repay the loan is a liability, recorded by crediting Notes Payable.

Brian IncBorrowed $8,000 from First Bank and Signed a Promissory Note