Mandel Corp.repaid a bank loan for $980,000.What effect does this transaction have on these accounts?

Question

Quizplus · Accepted Answer

The bank loan account will decrease by $980,000, and the company's cash account will decrease by the same amount as they made a payment. Therefore, option B is the correct choice. Option A is incorrect because it suggests that the bank loan account increases instead of decreases. Option C is incorrect because it suggests that the company's accounts payable account is affected, which is not related to this transaction. Option D is incorrect because it suggests an increase in the company's equity account, which is not accurate.