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

Name: Mandel Corp. repaid a bank loan for $980,000. What effect does this transaction have on these accounts?
Brand: Quizplus
Rating: 4.9 (60 reviews)

Question

Quizplus · Accepted Answer

Repaying a bank loan reduces the liabilities of the company, so the bank loan account will decrease. This transaction has no effect on assets, equity, or revenues/expenses. Option B shows a decrease in the bank loan account.