Electrodo Co

question 57

Multiple Choice

Electrodo Co.purchased land for $55,000 with $20,000 paid in cash and $35,000 in notes payable.What effect does this transaction have on the accounts under the accrual basis of accounting?

• A) Net increase in assets and liabilities of $55,000
• B) Net increase in assets of $35,000 and a net increase in liabilities of $35,000
• C) Net increase in assets of $55,000 and a net decrease in liabilities of $35,000
• D) Net increase in assets of $75,000 and a net decrease in liabilities of $30,000

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