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What effect this transaction have on accounting equation

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Question - Marvin Company negotiated the purchase of a new building for $395,000. Marvin paid a $160,000 cash down payment and will pay off the remainder over 7 years. What effect does this transaction have on the accounting equation?

a. $160,000 net increase in assets and $160,000 increase in liabilities

b. $160,000 net decrease in assets and $235,000 decrease in liabilities

c. $235,000 net increase in assets and $235,000 increase in liabilities

d. $395,000 net increase in assets and $235,000 increase in liabilities

Reference no: EM133185564

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