The button will record this transaction with a credit to Notes Payable in the amount of $1,000. Thus, option second is correct.
Notes payable are long-term liabilities that indicate the money a company owes its financiers—banks and other financial institutions, as well as other sources of funds such as friends and family.
They are long-term because they are payable beyond 12 months, though usually within five years. Therefore, it can be concluded that The button company will record this transaction with a $1,000 credit to Notes Payable. As a result, option two is correct.
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Your question was incomplete, probably the complete question was...
_____ in the amount of ______.
Multiple choice question.
Cash; $1,060
Notes Payable; $1,000
Cash; $1,000
Notes Payable; $1,020
Cash; $1,020
Notes Payable; $1,060
