Question

Jasper makes a $86,000, 90-day, 7% cash loan to Clayborn Co. Jasper's entry to record the transaction should be: Multiple Choice Debit Notes Receivable for $86,000; credit Cash $86,000. Debit Accounts Receivable $86,000; credit Notes Receivable $86,000. Debit Cash $86,000; credit Notes Receivable for $86,000. Debit Notes Payable $86,000; credit Accounts Payable $86,000. Debit Notes Receivable $86,000; credit Sales $86,000.

Answer 1

Answer:

Debit Notes Receivable for $86,000; credit Cash $86,000

Explanation:

The journal entry to record the cash loan is given below;

Notes Receivable $86,000

           To Cash $86,000

(Being cash loan is recorded)

Here the note receivable is debited as it increased the assets and credited the cash as it decreased the assets

Therefore the first option is correct