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Roland Corporation borrows $10,000 from the bank by signing a promissory note. Recording this transaction will include:

User Dal Hundal
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Answer: Credit to Notes Payable or a Debit to Cash

Step-by-step explanation:

As there are no options, those two options represent how the promissory note will be recorded in the books. A promissory note is a liability so when it increases it is credited. Notes will therefore be credited for $10,000.

The promissory note will give the company cash which is an asset so it is debited when it increases. The cash account will therefore be debited for the amount of $10,000.

User Mindan
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