The act of a contractual promise creates an IOU.
To the bank this loan, this IOU is an asset:
|
Bank Balance Sheet |
|
| Asset | Liability |
| Loan to Customer $1000 | |
| TOTAL: $1000 | |
To the one who takes out the loan, this IOU is a liability:
|
Debtor |
|
| Asset | Liability |
| Loan to Customer $1000 | |
| TOTAL: $1000 | |