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16 April, 07:30

Grayson Bank agrees to lend the Trust Company $104,980 on January 1. Trust Company signs a $104,980, 6%, 9-month, interest-bearing note. The entry made by Trust Company on January 1 to record the proceeds and issuance of the note is:

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  1. 16 April, 07:34
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    Cash $104,980 (debit)

    Note Payable : Grayson Bank $104,980 (credit)

    Explanation:

    When the note is issued, recognize the Assets of Cash and also recognize the Liability : Note Payable.

    The Journal entry to record the transaction will be:

    Cash $104,980 (debit)

    Note Payable : Grayson Bank $104,980 (credit)
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