A promissory note is an unconditional (not subject to any conditions) promise in writing to pay on demand or at a future date a definite sume of money. The person who signs the note and thereby promises to pay is called the maker of the note. The person to whom payment is to be made is called the payee of the note. In the illustration below, Pacific Rim Corp. is the maker of the note and First National Bank is the payee.
From the view point of the maker, Pacific Rim, the illustrated note is a liability and is recorded by crediting the Notes Payable account. However, from the viewpoint of the payee, First National Bank, this same note is an asset and is recorded by debiting the Notes Receivable account. The maker of a note expects to pay cash at the maturity date (or due date); the payee expects to receive cash at that date.