Question

On September 1, Vicario, Inc., borrows $100,000 from First National Bank at 6 percent annual interest. This note is due in 90 days.

Prepare the September 1 journal entry for Vicario.

Answer 1

Step-by-step explanation:

The journal entry is shown below:

Cash A/c Dr $100,000

To Notes payable A/c $100,000

(Being the issuance of the note payable is recorded)

For recording this transaction, we debited the cash account as it increases the asset and credited the note payable account as it also increases the liabilities account