Row,IncNeeded Some Long-Term Financing and Arranged for a 10-Year,$100,000,7% Mortgage

question 210

Multiple Choice

Row,Inc.needed some long-term financing and arranged for a 10-year,$100,000,7% mortgage loan on January 1,2010.Annual payments of $14,238 will be made on December 31 each year.What effect will the payments have on the accounting equation?

• A)Total assets,liabilities and shareholders' equity will all decrease.
• B)Only total assets and total liabilities will decrease.
• C)Only total assets and total shareholders' equity will decrease.
• D)Total liabilities will increase and total shareholders' equity will decrease.

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Definitions:

Graham Wallas

A social psychologist and co-founder of the London School of Economics, known for his work on creativity and the thought process.

Graham Wallas

A British psychologist and educationalist who contributed to the understanding of creative processes and political psychology.

Verification

The act of confirming the authenticity, correctness, or legitimacy of something.

Nominal Group Method

A structured form of group decision-making where individual members anonymously write down their ideas, which are then discussed and ranked to make a decision.