Borrowing $100 000 of cash from Pastoral National Bank would:
Group of answer choices
none of the above would occur.
increase liabilities by a debit and increase cash by a debit.
increase cash by a credit and increase notes payable by a debit.
increase liabilities by a credit and increase cash by a debit.
decrease cash by a debit and decrease notes payable by a credit.
Increase liabilities by a credit and increase cash by a debit.
When a company borrows $100,000 in cash from Pastoral National Bank, it records this transaction as an increase in its liabilities, specifically as a new liability called "Notes Payable." This increase in liabilities is recorded with a credit entry. At the same time, the company's cash balance increases, which is recorded with a debit entry. Therefore, the correct answer is:
Increase liabilities by a credit and increase cash by a debit.
