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:

Fibrous

Consisting of or characterized by fibers, often referring to a type of tissue in plants or the structure of certain muscle tissues in animals.

Haustoria

Specialized structures of parasitic plants or fungi that penetrate host tissues to extract water and nutrients.

Root Nodules

Structures formed on the roots of certain plants, such as legumes, that house nitrogen-fixing bacteria, aiding in the conversion of atmospheric nitrogen into a form the plant can use.

Bacteria

Single-celled microorganisms that can exist either as independent (free-living) entities or as parasites, and may cause disease or be beneficial, playing key roles in processes like fermentation and decomposition.