2. Speedy Limited secured a $48,000 business loan and this money was deposited into the company's bank account. what is debit and what is credit?
Question
Solution 1
In accounting terms, when Speedy Limited secures a $48,000 business loan, the company's bank account (an asset) increases. Therefore, you would debit the bank account. On the other hand, the company now has a liability (the loan) that it must pay back, so you would credit the loan account.
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