Question

On 1/1, RS Handyman Services took out a ten (10) month loan in the amount of $10,000 cash in exchange for signing a 12 month promissory note. On 6/1, what journal entry should RS Handyman Services record? (Select ALL that apply)

Answer 1

Cash (Dr.) $10,000

Short term promissory Notes payable (Cr.) $10,000

Step-by-step explanation:

Handyman services signed a notes for cash of $10,000, which is payable in 12 month time. This will be considered as short term note payable because the duration of notes maturity is less than a year.