Tandem Company borrowed $32,000 of cash from a local bank.Which of the following choices accurately reflects how this event affects the accounting equation?
$\begin{array}{|c|c|c|c|c|c|c|c|}
\hline & \text { Assets } & = & \text { Liabilities } & + & \begin{array}{c}
\text { Common } \
\text { Stock }
\end{array} & + & \begin{array}{c}
\text { Retained } \
\text { Earnings }
\end{array} \
\hline \text { A } & \text { NA } & = & 32,000 & + & \text { NA } & + & 32,000 \\hline \mathrm{B} . & 32,000 & = & \mathrm{NA} & + & 32,000 & + & \mathrm{NA} \
\hline \mathrm{C} . & 32,000 & = & \mathrm{NA} & + & \mathrm{NA} & + & 32,000 \
\hline \mathrm{D} . & 32,000 & = & 32,000 & + & \mathrm{NA} & + & \mathrm{NA} \
\hline
\end{array}$

Question

Quizplus · Accepted Answer

When Tandem Company borrows $32,000, its assets (cash) increase by $32,000, and its liabilities (loan payable) also increase by $32,000. This keeps the accounting equation balanced.

Tandem Company Borrowed $32,000 of Cash from a Local Bank