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Ir competitive analysis shows that Digby invested in new production facilities, including plant and...

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Accounting

Ir competitive analysis shows that Digby invested in new production facilities, including plant and equipment last year. It appears that this investment
was funded two ways. The first was with bonds that had a face value of $4,736,044 at 13.54% interest. The second was using equity that amounted to
$49,310,000.
Assuming a straight line depreciation of 15 years, I would like to verify which of the effects shown below directly resulted from this transaction? I'm
confident two are correct but l'll let you sort out which ones those are.
Sincerely,
Samantha
Samantha Jorgenson
Board Member, Accounting & Finance | Andrews Corporation
Choose all resjonses that apply.
Buying the plant had no net effect on the Cash account.
On the Balance sheet, Plant and Equipment increased by $44,574,000
Cash went up when the Bond was issued by $4,736,044
On the Balance sheet, Retained Earnings decreased by $49,310,000.
Cash was drawn from retained earnings to cover the $49,310,000 difference between the plant purchase and bond
issue.
Cash went up by $44,574,000 when the plant was purchased.
image

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