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.

Here's the step by step:

1. Identify the accounts involved: In this case, the accounts are the company's bank account and the loan account.

2. Determine if each account increases or decreases: The bank account increases because it has more money in it. The loan account also increases because the company owes more money.

3. Apply the debit/credit rules: In accounting, asset accounts like the bank account increase on the debit side, so you would debit the bank account. Liability accounts like the loan account increase on the credit side, so you would credit the loan account.

So, in conclusion:

- Debit: Bank Account (Asset)
- Credit: Loan Account (Liability)

Question

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.

Here's the step by step:

1. Identify the accounts involved: In this case, the accounts are the company's bank account and the loan account.

2. Determine if each account increases or decreases: The bank account increases because it has more money in it. The loan account also increases because the company owes more money.

3. Apply the debit/credit rules: In accounting, asset accounts like the bank account increase on the debit side, so you would debit the bank account. Liability accounts like the loan account increase on the credit side, so you would credit the loan account.

So, in conclusion:

- Debit: Bank Account (Asset)
- Credit: Loan Account (Liability)

Knowee AI · Accepted Answer

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.

Here's the step by step:

1. Identify the accounts involved: In this case, the accounts are the company's bank account and the loan account.

2. Determine if each account increases or decreases: The bank account increases because it has more money in it. The loan account also increases because the company owes more money.

3. Apply the debit/credit rules: In accounting, asset accounts like the bank account increase on the debit side, so you would debit the bank account. Liability accounts like the loan account increase on the credit side, so you would credit the loan account.

So, in conclusion:

- Debit: Bank Account (Asset)
- Credit: Loan Account (Liability)

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

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?

Solution

Similar Questions

Upgrade your grade with Knowee