What is the journal entry for taking loan from bank?

Answer 1

When a business takes a loan from a bank, the journal entry would typically involve debiting the cash account and crediting the notes payable account. For example, if a company receives $10,000 in cash from a bank loan, the entry would be:

• Debit Cash $10,000
• Credit Notes Payable $10,000

This reflects an increase in cash assets and an increase in liabilities due to the loan obligation.