Elite Inc. purchased $6,500 of office equipment. It paid $1,250 cash as a down payment, with the remaining $5,250 ($6,500 - $1,250) due in five monthly installments of $1,050 ($5,250 5) beginning January 1, 20Y6. Which of the following is the effect of this transaction on the financial statements?

a.There are no entries in the balance sheet.

b.There are no entries in the income statement.

c.There is an increase in cash flows from operating activities by $1,250 in the statement of cash flows.

d.There is an increase in cash flows from investing activities by $1,250 in the statement of cash flows.