ABC company took a loan $5,000 from the bank on Jan. What is the correct accounting...

ABC company took a loan $5,000 from the bank on Jan. What is the correct accounting treatment?

Select one or more:

a. Credit Notes Payable 5,000 and Debit Cash 5,000.

b. Credit Notes Payable 5,000 and Credit Cash 5,000.

c. Debit Notes Payable 5,000 and Debit Cash 5,000.

d. Debit Cash 5,000 and Credit Notes Payable 5,000.

Expert Solution

Option a is correct i.e Credit Notes Payable 5000 and Debit Cash 5000

Reason:

ABC company took loan which increase the Note payable and recorded with credit. Receiving cash which increase asset and recorded with debit.

ekkarill92 answered 2 years ago

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