if-a-company-purchases-equipment-worth-50000-by-taking-a-loan-how-does-this-tran

Question

If a company purchases equipment worth $50,000 by taking a loan, how does this transaction affect the fundamental accounting equation?

Accepted Answer

Assets increase by $$50,000; Liabilities increase by 50$$,000; Equity remains unchanged.

Answer

Assets increase by $$50,000; Liabilities remain unchanged; Equity increases by 50$$,000.

Answer

Assets remain unchanged; Liabilities increase by $$50,000; Equity increases by 50$$,000.

Answer

Assets increase by $$50,000; Liabilities decrease by 50$$,000; Equity remains unchanged.

If a company purchases equipment worth \$50,000 by taking a loan, how does this transaction affect the fundamental accounting equation?