A Shareholder Invested $75,000, Made Up of $50,000 in Cash

Multiple Choice

A shareholder invested $75,000, made up of $50,000 in cash and a vehicle worth $25,000, in a new company and received shares in exchange.What is the effect of this transaction on the accounting equation?

A) Assets increases by $75,000 and owners' equity increases by $75,000.
B) Assets increases by $75,000 owners' equity increases by $50,000, and liabilities increases by $25,000.
C) Assets increases by $50,000 and owners' equity increases by $50,000.
D) Assets increases by $50,000 and liabilities increases by $50,000.