Question

On June 1, Oriole Company Ltd. borrows $100,000 from Acme Bank on a 6-month, $100,000, 6% note. The note matures on December 1. Prepare the entry on June 1. (Credit account titles are automatically indented when amount is entered. Do not indent manually.)

Answer 1

Answer:

Journal Entry :

Bank $100,000  (debit)

Note Payable : Acme Bank (credit)

Explanation:

In Oriole Company Ltd books the following entries must be made :

The assets of cash should be increase (debit) at the same time, the liabilities arising on the Note Payable must also increase (credit).