Ask Experts Questions for FREE Help !
Ask
    juliana7565's Avatar
    juliana7565 Posts: 1, Reputation: 1
    New Member
    		  
    #1

    Mar 2, 2009, 08:57 PM
    Debit, credit or both if a business owes a bank in A/P
    If a person has a business and has borrowed money from a bank. In doing their book, how would they classify that transaction account. Would it be a debit, credit account or both
    ASKnRECIEVE's Avatar
    ASKnRECIEVE Posts: 9, Reputation: 1
    New Member
    		  
    #2

    Mar 2, 2009, 09:53 PM

    The journal entry would be something like this:
    Debit: Cash
    Credit: Loans Payable
    ROLCAM's Avatar
    ROLCAM Posts: 1,420, Reputation: 23
    Ultra Member
    		  
    #3

    Mar 2, 2009, 10:06 PM

    This is the way to remember for all time :-

    All expenses and assets are DEBITS
    All incomes and liabilities and equity are CREDITS.

    E + A = I + L + EQUITY

    Borrowing money from the Bank is a Liability.
    Now you should know the answer from above.
Not your question? Ask your question View similar questions
 

Question Tools Search this Question
Search this Question:

Advanced Search

Add your answer here.


Check out some similar questions!

Credit or debit [ 2 Answers ]

How do I know what to put in debit or credit on a t_account? That is the only thing messing me up right now.

Debit or Credit [ 1 Answers ]

The expected balance in Prepaid Insurance

Debit garnishment of a bank account [ 1 Answers ]

I was sued by a debt collector and was ordered to pay 25 percent of my income. I recently had a debit charge to my bank account also by the same company which made my account overdrawn. I wanted to find out if they can charge me like that since they already take 25 percent of my earnings and then...

Setting up a direct debit between bank account an ISA? [ 1 Answers ]

Hi guys. I need to start saving some cash so I've been trying to figure out if I can set up a direct debit between my HSBC account and an ISA, can anyone tell me if and how to do this? Thanks a lot!

Debit balance, debit entries, and credit entries [ 1 Answers ]

This is a silly question I'm sure, and the answer is very simple, but it is driving me crazy... The problem is: At the beginning of the year, The Office Equipment account of Gulf Coast Airlines had a debit balance of $126,900. During the year, debit entries of $23, 400 and credit entries of...

View more questions Search