Reference no: EM132427679

Question -

Jan 5 Corp purchased equipment to be used in the business for $20,000.

Jan 8 Corp purchased inventory costing $200,000 by paying $120,000 in cash, the remainder was put on credit accounts with suppliers.

Jan 15 Corp hired five employees costing $2000.000 each employee will be paid $1000 at the end of each month.

Jan 30 Corp paid $6,000 cash for one-year insurance policy, the policy period will begin of Feb 1 year 1.

What will the impact be Jan 3 event of the company's balance sheet on that date along with the increase of cash of $250,000?

a. Loan payable will increase $250,000.

b. Loan payable will increase $370,000, and retain earning will decrease $120,000.

c. Loan payable will increase $370,000.

d. Paid in capital will increase $250,000.