Elwood Company purchases a truck for $8,000, paying $2,000 in cash and signing a note payable for the remaining amount. Which of the following is true of this transaction?
a. total assets will increase by $8,000
b. total liabilities will decrease by $6,000
c. assets and liabilities will increase by $6,000
d. total liabilities will increase by $8,000
e. assets and liabilities will decrease by $8,000
Answer: c. assets and liabilities will increase by $6,000
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