Q43. Borrowings
Entity A borrowed $20,000 from a bank and received the full amount in cash. The loan is due in 6 months.
Prepare a journal entry to record this transaction.

A43. Increases in borrowings are recorded on the credit side.

  Debit Credit
Cash 20,000  
     Short-term borrowings   20,000

$60,000 borrowed from a bank was deposited in a checking account of Entity B. The loan is due 3 years later.

  Debit Credit
Bank deposits 60,000  
     Long-term borrowings   60,000

Borrowings due after 3 years are recorded as long-term borrowings.

© AccountingInfo.com

Related Posts