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9 If a company takes out a 5-year equally amortizing loan of 20,000, and 6...

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Accounting

9

If a company takes out a 5-year equally amortizing loan of 20,000, and 6 months later purchases equipment with that loan, what will happen to its financial statements?

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PP&E will increase by 4,000.

Current portion of long-term debt will increase by 4,000.

Capital expenditure will increase by 16,000.

Non-current portion of long-term debt will increase by 20,000.

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