Question

Watunga County Bank agrees to lend Marigold Granite Company $592000 on January 1. Marigold Granite Company signs a $592000, 8%, 9-month note. The entry made by Marigold Granite on January 1 to record the proceeds and issuance of the note is

Answer 1

Step-by-step explanation:

The journal entry is shown below:

On January 1

Cash A/c Dr $592,000

To Note Payable A/c $592,000

(Being issuance of the mortgage note payable is recorded)

For recording this transaction we debited the cash account as it increases the cash account and credited the note payable so that the correct posting could be done