Question

When a company issues a note payable to satisfy an account payable, there will be:

Answer 1

Answer- when a company issues a note payable to satisy an account payable, there will be

Accounts payable debit

Notes payable credit

Explanation:-

Account payable and notes payable both are liabilities but notes payable has increased as it is issued to creditors so it is credited while accounts payable has decreased as the closure of accounts payable so it is debited. As this is rules in accounting if a liability has increased it will be credited and if a liability has decreased it will be debited.