The Macro Corporation has purchased land for $100,000 and has financed 50% of the cost using long-term debt. The effect on its balance sheet is _______________________________.

Question

Quizplus · Accepted Answer

The purchase of land for $100,000 will result in an increase in assets of $100,000 on the balance sheet. However, since 50% of the cost of the land has been financed using long-term debt, there will be an increase in liabilities of $50,000 as well. Therefore, the correct option is C - an increase in assets of $100,000, and an increase in liabilities of $50,000.

The Macro Corporation Has Purchased Land for $100,000 and Has