Question: On January 1 , 2 0 1 9 , Flip - Flop Inc. purchased a trademark from Cool Shoe Inc. for $ 2 0 0

On January 1,2019, Flip-Flop Inc. purchased a trademark from Cool Shoe Inc. for $200,000. They paid for the purchase with $100,000 in cash and $100,000 in Flip-Flop common stock. If Flip-Flop has long-term debt on their balance sheet, which of the following describes the effect of the transaction on Flip-Flop Inc.?

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