Question

Fischer Company borrowed $66,000 from National bank on August 1 for three months; 6% interest is payable the first of each month, starting September 1. Fischer's year end is September 30 and the company records adjusting entries only at that time. Prepare journal entry to record the receipt of the bank ioan on August 1. (Credit account titles are outomatically indented when the amount is entered. Do not indent manually. List all debit entries before credit entries.)

Answer 1

The journal entry to record the receipt of the bank loan on August 1 is a debit to Cash and a credit to Notes Payable.

Step-by-step explanation:

The journal entry to record the receipt of the bank loan on August 1 would be:

1. Debit Cash - $66,000 (The amount of the loan received)
2. Credit Notes Payable - $66,000 (The liability created by borrowing)