Lanni Products is a start-up computer software development firm. It currently owns computer equipment worth $31,000 and has cash on hand of $18,000 contributed by Lanni’s owners. For each of the following transactions, identify the real and/or financial assets that trade hands. Choose one option for following blank: A. real asset. B. financial asset. C. real liability. D. Finanical liability. The bank loan is a Financial liability for Lanni, and a Financial asset for the bank. The cash Lanni receives is a Financial asset . 1. The new financial asset destroyed or created is Lanni's promissory note to repay the loan. Lanni uses the cash from the bank plus $18,000 of its own funds to finance the development of new financial planning software. Lanni transfers financial asset (cash) to the software developers. In return, Lanni receives the completed software package, which is a real asset. Lanni exchanges the real asset (the software) for a Financial asset, which is 1,400 shares of Microsoft stock. If Microsoft issues new shares in order to pay Lanni, then this would represent the creation of new Financial asset. 2. Lanni sells the shares of stock for $40 per share and uses part of the proceeds to pay off the bank loan. By selling its shares in Microsoft, Lanni exchanges one (select an option) (1,400 shares of stock) for another ($56,000 in cash). Lanni uses the (select an option) of $48,000 in cash to repay the bank and retire its promissory note. The bank must return its (select an option) to Lanni. The loan is created or destroyed in the transaction, since it is retired when paid off and no longer exists.
Lanni Products is a start-up computer software development firm. It currently owns computer equipment worth $31,000 and has cash on hand of $18,000 contributed by Lanni’s owners.
For each of the following transactions, identify the real and/or financial assets that trade hands. Choose one option for following blank: A. real asset. B. financial asset. C. real liability. D. Finanical liability.
The bank loan is a Financial liability for Lanni, and a Financial asset for the bank. The cash Lanni receives is a Financial asset .
1. The new financial asset destroyed or created is Lanni's promissory note to repay the loan.
Lanni uses the cash from the bank plus $18,000 of its own funds to finance the development of new financial planning software.
Lanni transfers financial asset (cash) to the software developers. In return, Lanni receives the completed software package, which is a real asset.
Lanni exchanges the real asset (the software) for a Financial asset, which is 1,400 shares of Microsoft stock. If Microsoft issues new shares in order to pay Lanni, then this would represent the creation of new Financial asset.
2. Lanni sells the shares of stock for $40 per share and uses part of the proceeds to pay off the bank loan.
By selling its shares in Microsoft, Lanni exchanges one (select an option) (1,400 shares of stock) for another ($56,000 in cash). Lanni uses the (select an option) of $48,000 in cash to repay the bank and retire its promissory note. The bank must return its (select an option) to Lanni.
The loan is created or destroyed in the transaction, since it is retired when paid off and no longer exists.
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