You the owner of XYZ Day Care, buy a new van for your business. The van costs $20,000, all of which you borrow from First American Bank. What describes the journal entry for this transaction?

To answer this question, we need to understand the concept of journal entries and how they are recorded in accounting.

A journal entry is the initial step in the accounting process where each transaction is recorded in chronological order. It consists of at least two parts - a debit and a credit - and follows the basic accounting equation, which states that assets equal liabilities plus owner's equity.

In this case, the transaction involves buying a new van for the XYZ Day Care business by borrowing $20,000 from First American Bank. Let's break down the journal entry:

1. Identify the accounts affected:
- Van (an asset account)
- Notes Payable (a liability account)

2. Determine whether the accounts are debited or credited:
- The Van account will increase, so it is debited.
- The Notes Payable account represents a liability that increases, so it is credited.

3. Assign the dollar amount to each account:
- The Van account is increased by $20,000, so it is debited for $20,000.
- The Notes Payable account is increased by $20,000, so it is credited for $20,000.

Therefore, the journal entry for this transaction will be:
Debit: Van (Asset) $20,000
Credit: Notes Payable (Liability) $20,000

This journal entry records the increase in the Van asset account and the corresponding increase in the Notes Payable liability account. Keep in mind that the specific accounts used may vary depending on the accounting system and chart of accounts used by XYZ Day Care.