The statement is **False**.

### Explanation:
When recording a monthly installment payment for a loan that affects notes payable, the following accounting entries typically occur:

1. **Debit the Notes Payable Account:** This reflects the reduction of the liability owed. When a payment is made, a portion of it goes toward the principal amount of the loan, which decreases the total liability.

2. **Debit Interest Expense:** This reflects any interest that has accrued on the outstanding loan amount and is part of the payment made.

3. **Credit Cash or Bank:** This reflects the outflow of cash or bank funds to make the installment payment.

4. In this case, the entry does not include a credit to Notes Payable; rather, it shows a debit to that account to reduce the liability. Thus, the correct adjustment is that the Notes Payable account should be debited, not credited. The credit will be towards the cash or bank account used to make the payment.

Therefore, the initial statement claiming a credit to Notes Payable is inaccurate and represents a misunderstanding of basic accounting principles surrounding loan repayments.

Question

The statement is **False**.

### Explanation:
When recording a monthly installment payment for a loan that affects notes payable, the following accounting entries typically occur:

1. **Debit the Notes Payable Account:** This reflects the reduction of the liability owed. When a payment is made, a portion of it goes toward the principal amount of the loan, which decreases the total liability.

2. **Debit Interest Expense:** This reflects any interest that has accrued on the outstanding loan amount and is part of the payment made.

3. **Credit Cash or Bank:** This reflects the outflow of cash or bank funds to make the installment payment.

4. In this case, the entry does not include a credit to Notes Payable; rather, it shows a debit to that account to reduce the liability. Thus, the correct adjustment is that the Notes Payable account should be debited, not credited. The credit will be towards the cash or bank account used to make the payment.

Therefore, the initial statement claiming a credit to Notes Payable is inaccurate and represents a misunderstanding of basic accounting principles surrounding loan repayments.

Knowee AI · Accepted Answer

The statement is **False**.

### Explanation:
When recording a monthly installment payment for a loan that affects notes payable, the following accounting entries typically occur:

1. **Debit the Notes Payable Account:** This reflects the reduction of the liability owed. When a payment is made, a portion of it goes toward the principal amount of the loan, which decreases the total liability.

2. **Debit Interest Expense:** This reflects any interest that has accrued on the outstanding loan amount and is part of the payment made.

3. **Credit Cash or Bank:** This reflects the outflow of cash or bank funds to make the installment payment.

4. In this case, the entry does not include a credit to Notes Payable; rather, it shows a debit to that account to reduce the liability. Thus, the correct adjustment is that the Notes Payable account should be debited, not credited. The credit will be towards the cash or bank account used to make the payment.

Therefore, the initial statement claiming a credit to Notes Payable is inaccurate and represents a misunderstanding of basic accounting principles surrounding loan repayments.

The entry to record monthly installment payments includes a credit to Notes Payable.Group startsTrue or False

Question

The entry to record monthly installment payments includes a credit to Notes Payable.

Solution

Explanation:

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