I have a question that I don't seem to find why the correct answer is the correct answer!
3. Peter takes a long from the bank for £3500. How will this be entered into the ledger accounts?
a. Credit bank, Debit loan
b. Debit bank, Credit loan
c. Debit bank, Credit capital
d. Credit bank, Debit capital
The correct answer according to my book is (d) but I cannot understand why we are recording as a Capital account and not as a Loan account. Is this a rule?
thank you very much in advance!