The Austin Land Company sold land for $85,000 in cash. The land was originally purchased for $65,000, and at the time of the sale, $40,000 was still owed to Regions Bank on that purchase. After the sale, The Austin Land Company paid off the loan to Regions Bank. What is the effect of the sale and the payoff of the loan on the accounting equation?
A) assets decrease $20,000; liabilities decrease $40,000; owner's equity increases $20,000
B) assets increase $20,000; liabilities decrease $40,000; owner's equity increases $20,000
C) assets decrease $25,000; liabilities decrease $40,000; owner's equity increases $65,000
D) assets increase $45,000; liabilities decrease $40,000; owner's equity increases $85,000
A
You might also like to view...
Proper segregation of duties does not prohibit a quality-control administrator from performing change control and problem management.
a. true b. false
After the three-day notice is served and the tenant still does not cure the default, the landlord may:
A. have a friend remove the tenant and the tenant's belongings from the property B. go to the sheriff to get the tenant thrown out C. initiate a peaceful eviction proceeding D. initiate an unlawful detainer action