 In this presentation, we will record the journal entry related to issuing a note for cash. Support Accounting Instruction by clicking the link below, giving you a free month membership to all of the content on our website broken out by category further broken out by course. Each course then organized in a logical, reasonable fashion, making it much more easy to find what you need then can be done on a YouTube page. We also include added resources such as Excel practice problems, PDF files and more like QuickBooks backup files when applicable. So once again, click the link below for a free month membership to our website and all the content on it. In other words, a financing option that we have for the business is to issue a note receiving cash recording the note payable. We're going to have our information on the left record that into our general journal and then we'll post it to our worksheet. The trial balance being in order we have our beginning and ending trial balance in order of assets and grain liabilities and orange equity in light blue revenue and expenses in dark blue. We're going to have debits non bracketed credits or positive and negative for Excel debits minus the credits equaling zero. This gives us a nice little worksheet just to give us an idea of what happens when we post these out in terms of the accounting equation and individual accounts. So what we're going to do is we can call this an installment notes or a note where we're going to pay back interest and principal. But when we record the note, the thing that really gets people most of the time is that there's more information than we need to record the note. It's really easy. Typically mean we have a loan of 100,000. So we're going to take out a loan say from the bank. There's going to be interest rate 9% number of payments 36. Now the thing that's confusing about this is that we don't really when we record the loan. This information doesn't matter to us because it could be any I could be you know the interest could be 2% and the payback periods could be you know 100 it doesn't it doesn't matter when we first record the loan because interest only matters as time passes. So when we record it, then if you see a problem just to record the loan, then you just think well is cash affected? Yeah, we're getting cash. That's why we're getting the loan. So the cash is going up. I'm going to copy cash, put it on top. Cash is a debit balance. We do the same thing to it to make it go up. So it's going to be 100,000 debit. Then we're going to credit something for 100,000. I'm going to use a little formula negative of this number. You could put in just negative 100,000. And then it's going to go into what we'll call loan payable or note payable. And that's it. So I'm just going to copy the note payable. It's a liability account. It's going to go up in the credit direction because we owe something in the future. So I'm going to copy that and put it in before right click and paste 123. So that's all there is to it. Most again, most of the problem that people have when they record the initial loan is that they think that the interest has got to be in there somewhere or cause them more complications. And the interest is important, but it will be important when we calculate the amortization, when we make the decision to take the loan. But just for recording the loan, all we need to do is record this information. We just need to know what the loan is. Then we'll record the interest payments and how to calculate the annuity in another presentation. So to record this, we're going to go cash is here. Here's cash up top. We'll be in H three where we'll say equals point to the 100,000 and enter. And then we're just going to go to the note payable in H. This is where we're going to record this to H six equals point to the 100,000 and enter. So of course cash went up. That's why we're taking the loan out to finance the company. And then note payable, a liability went up. No effect on the revenue or expenses. There will be an effect when we pay back interest, when we pay back the rent on the loan.