Use the information above to answer the following question.The entry made by the company to record this loan to the employee will include a:
A)Debit to Accounts Receivable for $10,000.
B)Credit to Sales for $10,000.
C)Debit to Notes Receivable for $10,000.
D)Credit to Notes Payable for $10,000.

Question

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The entry made by the company to record the loan to the employee will include a debit to Notes Receivable because the company is lending money to the employee and expects to receive the repayment in the future. Therefore, the entry will be debit Notes Receivable $10,000 and credit Cash $10,000. Option A is incorrect because Accounts Receivable is an asset account used to record amounts owed to the company by customers for goods or services sold on credit. Option B is incorrect because Sales is a revenue account used to record the amount of sales made by the company. Option D is incorrect because Notes Payable is a liability account used to record amounts owed by the company to others for borrowing money.

Use the Information Above to Answer the Following Question