Karl's Kebabs Borrowed $5000 from the Bank for Kitchen Renovations

question 62

Multiple Choice

Karl's Kebabs borrowed $5000 from the bank for kitchen renovations. The effect of this transaction on the accounting equation is:

• A) Decrease assets $5000; decrease equity $5000.
• B) Increase assets $5000; decrease assets $5000.
• C) Increase assets $5000; increase liabilities $5000.
• D) Decrease liabilities $5000; decrease assets $5000.

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