Problem: On July 1, 2006, Gerdin Company borrowed $100,000. The company signed a note payable with interest at 6 percent per year. The note and interest are due on December 31, 2006. On December 31, 2006, Goode paid $103,000 to settle the debt in full. Gerdin has not prepared any financial statements since borrowing the money. Transaction analysis of the $103,000 cash payment on December 31, 2006, should reflect the following: a. decrease assets, $103,000; decrease liabilities, $103,000 b. decrease assets, $100,000; decrease stockholders' equity, $3,000; and decrease liabilities, $103,000 c. decrease stockholders' equity, $100,000; decrease liabilities, $3,000; and decrease assets, $103,000 d. decrease liabilities, $100,000; decrease stockholders' equity, $3,000; and decrease assets, $103,000 e. None of the above is correct

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On July 1, 2006, Gerdin Company borrowed $100,000. The company signed a note payable with interest at 6 percent per year. The note and interest are due on December 31, 2006. On December 31, 2006, Goode paid $103,000 to settle the debt in full. Gerdin has not prepared any financial statements since borrowing the money. Transaction analysis of the $103,000 cash payment on December 31, 2006, should reflect the following:

a. decrease assets, $103,000; decrease liabilities, $103,000

b. decrease assets, $100,000; decrease stockholders' equity, $3,000; and decrease liabilities, $103,000

c. decrease stockholders' equity, $100,000; decrease liabilities, $3,000; and decrease assets, $103,000

d. decrease liabilities, $100,000; decrease stockholders' equity, $3,000; and decrease assets, $103,000

e. None of the above is correct