Suppose you borrow $1,000 to purchase a car.Which of the following correctly represents the changes in your personal balance sheet after the bank lends the money,but before you spend it?
A) Assets: loan,+$1,000;Liabilities and net worth: checking deposit,+$1,000
B) Assets: loan,-$1,000,checking deposit,+$1,000;Liabilities and net worth: no change
C) Assets: loan,+$1,000,checking deposit,-$1,000;Liabilities and net worth: no change
D) Assets: checking deposit,+$1,000;Liabilities and net worth: loan,+$1,000
E) Assets: checking deposit,+$1,000;Liabilities and net worth: loan,-$1,000
Correct Answer:
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