Consider the balance sheet of the following bank.

Chase

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Reserves 3000 Checkable Deposits 5000

Loans 7000 Savings and Time Deposits 8000

Bond Holdings 4000 Equity 1000

Using balance sheets, show all the balance sheet steps of Chase making a loan of $1000. Provide a brief explanation for each step and assume that the loan check is re-deposited in another bank (provide a balance sheet for that bank as well). Verify how the money supply (M2) changes as a result