Question

Lauren Holland borrowed $ 10000 from Smart Touch Learning by writing a​ 1-year promissory note on November 1 with a 10​% annual interest rate. The journal entry Smart Touch Learning would record on November 1 would include a

Answer 1

Smart Touch Learning would record a debit to the Notes Receivable account and a credit to the Lauren Holland account for the $10,000 loan.

Step-by-step explanation:

The journal entry that Smart Touch Learning would record on November 1 would include a debit to the Notes Receivable account and a credit to the Lauren Holland account. This journal entry represents the initial transaction of Lauren Holland borrowing $10,000 from Smart Touch Learning.

The entry would look like this:

Notes Receivable $10,000 (debit)

Lauren Holland $10,000 (credit)

The debit to the Notes Receivable account indicates that the amount of $10,000 has been lent out to Lauren Holland and is now considered a receivable for Smart Touch Learning. The credit to the Lauren Holland account shows that Lauren Holland owes $10,000 to Smart Touch Learning.