Question

Lakeland Consulting purchased computer equipment for $10,000. Lakeland made a $2,000 down payment with the balance due within 90 days. The effect of the transaction is a(n): Multiple Choice Decrease in assets of $2,000, an increase in liabilities of $8,000, and an increase in owner's equity of $10,000

Answer 1

Increase in assets of $8,000 and an increase in liabilities $8,000

Explanation:

The effect of the transaction is shown below with the help of the accounting equation

Liabilities + Owner equity = Assets

$8,000 + 0 = $8,000

($10,000 - $2,000)

Therefore from the above calculation, we can see that there is an increase in assets also there will be an increase in liabilities but no effect on stockholder equity