Facts: On October 1 MetroBats (calendar year company) borrowed $100,000 from the bank by signing a 6 month note payable. Principal and interest are due in six months. At the end of the current year, MetroBats made the proper accruals for this item.
Question 1 (2 points)
On October 1, the proper accounting treatment of the borrowing of the funds from the bank will:
Question 1 options:
1)Decrease current assets and current liabilities.
2)Decrease current assets, current liabilities, and owners' equity.
3)Increase current assets and increase current liabilities.
4)Increase current assets and increase long-term liabilities
Save Question 2 (2 points)
The proper accounting treatment of the accrual at the end of the current year will:
Question 2 options:
1)Decrease current assets and decrease current liabilities.
2)Decrease current assets and decrease owners' equity.
3)Increase current liabilities and decrease owners' equity.
4)Increase current assets and increase current liabilities