A company borrows ($50,000) cash from Third National Bank. How does this transaction affect the accounting equation

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A company borrows \($50,000\) cash from Third National Bank.

How does this transaction affect the accounting equation for this company?

a. Assets increase by \($50,000;\) liabilities increase by \($50,000;\)
no effect on equity.

b. Assets increase by \($50,000;\) no effect on liabilities; equity increases by \($50,000.\) 

c. Assets increase by \($50,000;\) liabilities decrease by \($50,000;
no\) effect on equity.

d. No effect on assets; liabilities increase by \($50,000;\) equity increases by \($50,000.\)

e. No effect on assets; liabilities increase by \($50,000;\) equity decreases by \($50,000.\)

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Related Book For  book-img-for-question

College Accounting Ch 1-14

ISBN: 9781260904314

1st Edition

Authors: John Wild, Vernon Richardson, Ken Shaw

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