Question

Stear Corp. has taken a loan of $750,000 from a bank. The company's accountant enters the details of the transaction in the journal. The transaction needs to be posted in the ledger. In which accounts will the accountant record this entry?

A.
Cash in bank account – debit side Loan account – credit side
B.
Cash account – debit side Loan account – credit side
C.
Interest payable – debit side Loan payable – credit side
D.
Loan account – debit side Cash in bank account

Answer 1

The correct answer is option D which is a loan account.

Step-by-step explanation:

According to the description of the question, Stear Corp took a loan from the back, so it is obvious that accountant record client entry in loan account-debit side cash in the bank.

While in cash bank account entry, the record will be related to the total amount of money in one's account.

And also in interest payable, there will be information about payable interests.

Hence the correct option is D.