Question

Banks may borrow from or lend to another bank in the federal funds market. a loan of excess reserves from one bank to another bank is recorded as a(n) ________ for the borrowing bank and a(n) ________ for the lending bank.

Answer 1

Answer:

Liability and Assets

Explanation:

Banks when borrow or lend the money to another bank in the market of federal funds. Then the loan of the excess reserve from one bank to the another bank will be reported as a liability because they borrowed money from another bank for the borrowing bank and for the lending bank,it will be recorded as an asset.