Notes Payable

[Paccountant]

Question about notes payables:

When you give a company X amount of $. It is considered notes receivables. Which is a payable that is due from the other company.

Now my question is... when I receive a portion of X amount of dollars from that company, do I debit cash and credit notes receivables?

Or do I debit cash and credit notes payables?

Dumb question, but it should be notes receivables. Just want to make sure.

Any response is greatly appreciated.

 

[Mack Zilla]

I'll pitch in some help. It can't be a credit to notes payable. Notes payable would only be used for a transaction involving credit extended to you.

-Zack

 

[mike99]

Company:
Dr Bank/Cash
Cr Notes Payable (liability)
Receive cash from bank

Dr Notes Payable (liability)
Cr Bank
Pay back

Bank:
Dr Notes Receivable (asset)
Cr Bank/Cash
Lend out cash

Dr Bank/Cash
Cr Notes Receivable (asset)
Receive cash back from company

 

[Paccountant]

thanks mike!

 

[Shcoll]

Okay,
Payable is resource you have to pay for.
Originally, you received resource or cash in the past where you:
Dr. Cash or other asset
Cr. Payable

Receivable is resource or cash you gave to someone that they have to pay back.
Originally:
You debited Receivable and and credited cash or revenue. When you get paid
You will debit cash, and credit receivable.