b. January 10: Signed a line of credit with Little Local Bank to establish a $560,000 line of credit. Interest of 9% will be charged on all borrowed funds. How does this entry affect the accounting equation? If a financial statement item is not affected, select "No Entry" and leave the amount box blank or enter 0. If the effect on a financial statement item is negative, l.e, a decrease, be sure to enter the answer with a minus sign. Balance Sheet Income Statement Net Assets Liabilities + Stockholders' Equity Revenues c. February 1: Issued a $28,000 non-interest-bearing, six-month note to pay for a new machine. Interest on the note, at 12%, was deducted in advance. Activity Accounts Statement(s) Expenses = Income How does this entry affect the accounting equation? If a financial statement item is not affected, select "No Entry" and leave the amount box blank or enter 0. If the effect on a financial statement item is negative, i.e, a decrease, be sure to enter the answer with a minus sign. Remember: if a contra account is increased, it will have the effect of decreasing the corresponding financial statement item. Assets Balance Sheet d. March 1: Borrowed $210,000 on the line of credit. Activity Liabilities Stockholders' Equity Revenues Income Statement Net Expenses = Income