To meet its cash flow needs, a company obtained a 6 month bank loan in the amount of $30,000. Annual interest on the loan (note payable) is 10%, payable when the note is due.
What would the effect of this transaction on the company's current month accounting equation?
A) No effect on Assets; $30,000 decrease in Liabilities; $30,000 increase in Stockholders' Equity
B) $30,000 increase in Assets; $30,000 increase in Liabilities; No effect on Stockholders' Equity
C) $30,000 increase in Assets; No effect on Liabilities; $30,000 increase in Stockholders' Equity
D) No effect on Assets; 30,000 increase in Liabilities; $30,000 decrease in Stockholders' Equity
Correct Answer:
Verified
Q27: A company received a $24,000 payment for
Q28: A company received a $72,000 payment for
Q29: A company received $11,000 cash in exchange
Q30: A company received $33,000 cash in exchange
Q31: To meet its cash flow needs, a
Q33: At the beginning of the month, a
Q34: At the beginning of the month, a
Q35: A company performed $8,635 of services and
Q36: A company performed $25,905 of services and
Q37: A company paid employee wages of $24,000
Unlock this Answer For Free Now!
View this answer and more for free by performing one of the following actions
Scan the QR code to install the App and get 2 free unlocks
Unlock quizzes for free by uploading documents