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    Bank's assets and liabilities

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    Show how each of the following would initially affect a bank's assets and liabilities.

    a. Someone makes a $10,000 deposit.

    b. A bank makes a loan of $1,000 by establishing a checking account for $1,000.

    c. The loan described in part (b) is spent.

    d. A bank must write off a loan because the borrower defaults.

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    Solution Preview

    a. It will increase the liabilites (deposits) by $10000 and assets (cash) ...

    Solution Summary

    Impact on bank's assets and liabilities