A company raised $50,000 in cash by taking a one-year loan of $10,000 and a 5-year loan of $40,000. Which of the following is the correct journal entry to record this transaction?
Debit short-term debt $40,000; debit retained earnings $10,000; credit cash $50,000
Debit short-term debt $50,000; credit cash $50,000
Debit cash $50,000; credit long-term debt $50,000
Debit cash $50,000; credit short-term debt $10,000; credit long-term debt $40,000