Assume that Western Realty Co. borrowed $200,000 from Mountain First Bank and Trust. In recording the transaction,

Question:

Assume that Western Realty Co. borrowed $200,000 from Mountain First Bank and Trust. In recording the transaction, Western erroneously recorded the receipt as a debit to Cash, $200,000, and a credit to Fees Earned, $200,000.
(a) How would this error affect the equality of the trial balance?
(b) How would this error affect the income statement retained earnings statement, and balance sheet?