Question

A company prepares the following journal entry. In posting this transaction to T-accounts, which of the following will be required? (for cash and notes payable of $28000)

- Post $28,000 on the right side of the Cash T-account

- Post $28,000 on the left side of the Notes Payable T-account

- Post $28,000 on the left side of the Cash T-account

- None of these

Answer 1

To post the transaction of cash and notes payable of $28,000 to T-accounts, you would need to post $28,000 on the right side of the Cash T-account.

Step-by-step explanation:

In posting the transaction of cash and notes payable of $28,000 to T-accounts, the required entry would be to post $28,000 on the right side of the Cash T-account.

Answer 2

In the transaction of cash and notes payable of $28,000, $28,000 will be posted on the right side (credit side) of the Cash T-account and on the right side (credit side) of the Notes Payable T-account, indicating a decrease in cash and an increase in liabilities.

Step-by-step explanation:

When a company prepares a journal entry for a cash transaction involving notes payable, the correct postings to the T-accounts would be:

• Post $28,000 on the right side of the Cash T-account, as this represents a decrease in the company's cash balance.
• Post $28,000 on the right side of the Notes Payable T-account, as this represents an increase in the company's liabilities in the form of a new note payable.

Therefore, the second option presented in the question is incorrect because notes payable would increase on the right side, not the left. The third option is correct; when cash is decreased, it is posted on the left side (debit side) of the Cash T-account.