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QUESTION:
A company recorded borrowing $61,000 with a credit to Cash and a debit to Notes Payable. On the same say a $30,000 purchase of stock in another company was recorded with a Debit to cash and a credit to Marketable Securities. The effect on the journal entries is:
ANSWER: Assets and Liabilities are both understated $122,000.
Why is that the answer? How do you calculate that?
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