On June 30 the bank makes a loan to W. Byrnes on his ninety-day note, secured by Liberty Bond collateral. The general ledger entries are as follows:

Debit: Loans (1)....................

$1,200

Credit: Due to Depositors (37) ...

$1,200

or

Credit: Cashier's Checks Outstanding (39).................

1,200

This debit to the loan account would cause an increase in it to the extent of $1,200 as shown by the following illustration:

June 29

June 30

Debit

Credit

Balance

Debit

Credit

Balance

Loans

900,000

1,200

901,200

The amounts in this and other illustrations given are not intended to lead up to the figures given in the trial balance.