Question

Jordano Inc. buys a $500,000 motor for its operation and pays for it by taking out a bank loan. The company's assets will _____ by $500,000 while its liabilities will _____by $500,000.

Answer 1

Answer:The company's assets will rise by $500,000 while its liabilities will rise by $500,000.

What is accounting equation?

The accounting equation is the assets that are equivalent to the liabilities & equity, and the same should be shown in the balance sheet.

The accounting equation is given as:

Assets = Owner's equity + liability

The asset will rise because the company is purchasing new products, also the liability will rise because of the loan taken to purchase the asset.

Hence, the company's assets will rise by $500,000 while its liabilities will rise by $500,000.

Step-by-step explanation: