Final answer:
Smart Touch Learning's journal entry for Lauren Holland's $6000 loan at 15% annual interest would involve debiting the Notes Receivable for $6000. The interest accrued would be recognized in an adjustment later.
Step-by-step explanation:
When Lauren Holland borrowed $6000 from Smart Touch Learning by writing a 1-year promissory note on November 1 with a 15% annual interest rate, Smart Touch Learning would need to make a journal entry to record the note receivable and the anticipated interest income.
On November 1, the journal entry would include a debit to the Notes Receivable account for $6000, representing the principal amount of the loan given to Lauren. In addition, the interest to be accrued over the term of the note, which is $900 (calculated as $6000 * 15% * 1 year), would also be recorded through an adjustment at the end of the financial period, and not on November 1.
It's important to understand that while the loan is an asset for Smart Touch Learning, it wouldn't record the interest income until it is earned, which occurs as time passes and not immediately upon the giving of the loan.