Janus Inc.has excess cash of $100,000 and invests the same amount in corporate bonds on March 30,2015 that mature twenty years from the date of purchase.The company plans to keep the bonds until maturity.Based on the information provided,which of the following is true of the balance sheet line items on March 30,2015?

Question

Quizplus · Accepted Answer

When Janus Inc. invests the excess cash in corporate bonds, both cash and long-term assets will increase by $100,000. Liabilities and equity will not be affected by this investment, therefore, total assets will remain unchanged.

Janus IncHas Excess Cash of $100,000 and Invests the Same Amount