Notes Receivable

Notes Receivable represents written obligations the creditors receive from the debtors in exchange for funds. Notes Receivable is part of a company’s assets.

If a company loans out $1,000 and receives a promissory note saying they will be repaid that amount, the company enters $1,000 into the Notes receivable account in its assets.

The notes receivable that the company receives within a year are current assets of the balance sheet. Notes receivable that are greater than a year are in the noncurrent assets under their investments section of the balance sheet.