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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

$2.19