The F Company sold the land for $86,000 in cash. The land was originally purchased for $56,000, and at the time of the sale, $17,000 was still owed to First National Bank on that purchase. After the sale, The F Company paid off the loan to First National Bank. What is the effect of the sale and the payoff of the loan on the accounting equation? 1. assets increase by $20,000; liabilities decrease by $15,000; owner's equity increases by $5,000 2. assets increase by $60,000; liabilities decrease by $15,000; owner's equity increases by $20,000 3. assets increase by $13,000; liabilities decrease by $17,000; owner's equity increases by $30,000 4. assets increase by $20,000; liabilities decrease by $15,000; owner's equity increases by $35,000

The F Company sold the land for $86,000 in cash. The land was originally purchased for $56,000, and at the time of the sale, $17,000 was still owed to First National Bank on that purchase. After the sale, The F Company paid off the loan to First National Bank. What is the effect of the sale and the payoff of the loan on the accounting equation? 1. assets increase by $20,000; liabilities decrease by $15,000; owner's equity increases by $5,000 2. assets increase by $60,000; liabilities decrease by $15,000; owner's equity increases by $20,000 3. assets increase by $13,000; liabilities decrease by $17,000; owner's equity increases by $30,000 4. assets increase by $20,000; liabilities decrease by $15,000; owner's equity increases by $35,000

Intermediate Financial Management (MindTap Course List)

13th Edition

ISBN:9781337395083

Author:Eugene F. Brigham, Phillip R. Daves

Publisher:Eugene F. Brigham, Phillip R. Daves

Chapter6: Accounting For Financial Management

Section: Chapter Questions

Problem 5P: Kendall Corners Inc. recently reported net income of 3.1 million and depreciation of 500,000. What...

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