This section is from the book "Elementary Banking", by John Franklin Ebersole. Also available from Amazon: Elementary Banking.
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.
 
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