Question

The company purchases land by paying half in cash and signing a note payable for the other half. What shall be the effect?

A. Assets - Increase
Liabilities - No effect
Capital - Increase

B. Assets - Increase
Liabilities - Increase
Capital - No effect

C. Assets - No effect
Liabilities - Increase
Capital - Increase

D. Assets - Decrease
Liabilities - No effect
Capital - Decrease

Answer 1

The effect of the company purchasing land by paying half in cash and signing a note payable for the other half is an increase in assets and liabilities, with no effect on capital.

Step-by-step explanation:

The effect of the company purchasing land by paying half in cash and signing a note payable for the other half is:
A. Assets - Increase
Liabilities - Increase
Capital - No effect