Respuesta :
Answer:
Amount owed on a loan for the land = $80,000
Payment in cash for the loan = $80,000
(1) Assets decreases by $80,000 as cash is used for the payment of loan.
(2) Liabilities also decreases by the $80,000 i.e decrease in liability as the loan is settled down.
(3) Stockholders' equity: There is no change occurred in the seller's stockholders equity.
Answer:
Assets = Capital + Liabilities
Cash (-80000) Loan (-80000) [Loan paid by cash]
Explanation:
This treatment can be shown as effect on 'Accounting Equation'
Assets = Capital + Liabilities
Previous Details : Loan added in Liability = 80000
Cash Received : Cash Added in Assets = 298000 ; and Asset on A/c of which cash is received (Eg: Debtor/ Accrued Income) minus from Assets = 298000
Cash Received & Loan Paid : Cash minus from Assets = 80000 ; and
Loan minus from Liability = 80000
