1. Which of the following statements is true?

Group of answer choices

Debt financing is usually more expensive than equity financing.

Debt financing is always preferable to equity financing.

Debt financing increases owners' equity.

Debt financing requires interest and payment of principal, even in distressed times.

2. A firm received $100 cash for the future performance of a service. What is the effect on the accounting equation when the firm subsequently performs the service in full?