Tex co issued bonds at the price of 0.97, which is at face value $ 200,000,000. This version will affect the accounting equation to:
Group of answer choices
Assets and liabilities will both increase by $ 194 million.
Assets will increase by $ 200,000,000 and liabilities will increase by $ 194 million.
Assets and liabilities will both increase by $ 200,000,000.
Assets will increase by $ 194,000,000 and debt will increase by $ 200,000,000.
Answer
--Correct Answer = Option #1: Assets and Liabilities will both increase by $ 194 millions.
>Asset will increase by the amount of Cash received = $ 200
million x 97/100 = $ 194 million
>Liabilities will increase by face value - discount on issuance
of bonds = 200 million - (200 - 194) = 200 - 6 = $ 194
millions.
Tex co issued bonds at the price of 0.97, which is at face value $ 200,000,000....
Pix co issued bonds at the price of 0.97 which were at face value $ 200,000. Because of this version, then: a Assets and liabilities increased by $ 200,000 b Assets and liabilities increased by $194000 c Assets increased by $194,000 and liabilities decreased by $ 200,000 d Assets increased by $ 200,000 and liabilities increased by $ 194000
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