Multiple Choice
Slumbers,Inc.borrows $3,000 at 12% from a bank on September 1,2012 and agrees to pay the interest and principal in two years.What is the effect on the accounting equation of the adjusting entry to record interest for the year ended December 31,2012?
A) Assets will increase by $3,000.
B) Liabilities will decrease by $120.
C) Shareholders' equity will decrease by $120.
D) Cash will decrease by $120.
Correct Answer:
Verified
Correct Answer:
Verified
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