J.Lennon borrows a sum of money from Y.Ono.A promissory note is used to document the terms of the transaction.In this situation:
A)J.Lennon is considered the maker of the note.
B)J.Lennon is considered the payee of the note.
C)J.Lennon records the note as an asset in his accounting records.
D)The maker of the note could be either Y.Ono or J.Lennon depending on which party actually draws up the document.

Question

Quizplus · Accepted Answer

The person who borrows the money and agrees to pay it back is considered the maker of the promissory note. So in this scenario, J.Lennon is the maker of the note. Option B is incorrect because the payee is the person who lends the money (in this case, Y.Ono). Option C is also incorrect because a promissory note is not recorded as an asset in accounting records, as it represents a liability to be paid by the maker. Option D is incorrect because the maker of the note is the borrower, regardless of who draws up the document.

JLennon Borrows a Sum of Money from Y