A Company Borrowed $80,000 from a Bank by Signing a Long-Term

question 166

Multiple Choice

A company borrowed $80,000 from a bank by signing a long-term note payable. The journal the transaction would be recorded in is the:

• A) Sales journal.
• B) Purchases journal.
• C) General journal.
• D) Cash disbursements journal.
• E) Cash receipts journal.

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Definitions:

Co-own

To have joint ownership or share ownership rights of a property, asset, or entity with one or more individuals or entities.

Corporation

A legal entity that is separate from its owners, who share limited liability protection, and is recognized by law as having rights and responsibilities.

Profit

The right to go onto someone’s land and take part of the land or a product of it away from the land.

S Corporation

A special designation granted by the IRS to small businesses that allows them to pass corporate income, credits, and deductions through to shareholders, avoiding double taxation.