Suppose you have $10,000 USD, including a $5,000 USD loan. You purchase two assets for $5,000 USD each, one with cash and one with the loan. How would you reflect this transaction in financial statements (cash flow, balance sheet, etc.)?

Question

Accepted Answer

Answering how to show a transaction involving cash and loan in financial statements.

The cash purchase of an asset will be shown as a decrease in cash on the cash flow statement and as an increase in assets on the balance sheet.
The purchase made through bank loan will be shown as an increase in liabilities on the balance sheet and as an increase in cash on the cash flow statement.
The loan taken will be shown as an increase in liabilities on the balance sheet and as an increase in cash on the cash flow statement.
The net effect of the transaction will be an increase in assets and liabilities by 5000 US Dollars each on the balance sheet.

Accepted Answer

If I have 10000 us dollars with me,in which I take a loan of 5000 us dollars.suppose if I have purchased two assets of 5000 us dollars each ,one through cash is on asset side that is credit side  and one of loan taken is an loans and advance side means debit side

Accepted Answer

Asset is in credit side loan is in debt side

Suppose you have $10,000 USD, including a $5,000 USD loan. You purchase two assets for $5,000 USD each, one with cash and one with the loan. How would you reflect this transaction in financial statements (cash flow, balance sheet, etc.)?

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