Lanni Products is a start$-$up computer software development firm. It currently owns computer equipment worth $$29,000$ and has cash

on hand of $$10,000$ contrikuted by Lanni's owners.

For each of the following transactions, identify the real and$/$or financial assets that trade hands. Are any financial assets created or

destroyed in the transaction?

Required:

a$.$ Lanni takes out a bank loan. It receives $$40,000$ in cash and signs a note promising to pay back the loan over $3$ years.

The bank loan is a $($Click to select$)$ for Lanni, and a

for the bank. The cash Lanni receives is a

The new financial asset $($Click to select$)$ is Lanni's promissory note to repay the loan.

b$.$ Lanni uses the cash from the bank plus $$10,000$ of its own funds to finance the development of new financial planning software.

Lanni transfers $($Click to select$)($cash$)$ to the software developers. In return, Lanni receives the completed software package, which

is a $($Click to select$).$

c$.$ Lanni sells the software product to Microsoft, which will market it to the public under the Microsoft name. Lanni accepts payment in

the form of $1,200$ shares of Microsoft stock.

Lanni exchanges the $($Click to select$)($the software$)$ for a $($Click to select$)$ which is $1,200$ shares of Microsoft stock. If Microsoft

issues new shares to pay Lanni, then this represents the creation of new $($Click to select$).$

d$.$ Lanni sells the shares of stock for $$46$ per share and uses part of the proceeds to pay off the bank loan.

By selling its shares in Microsoft, Lanni exchanges one $($Click to select$)(1,200$ shares of stock$)$ for another $($ $$55,200$ in cash$).$ Lanni

uses the $($Click to select$)$ $$40,000$ in cash to repay the bank and retire its promissory note. The bank must return its

$($Click to select$)$ to Lanni. The loan is $($Click to select$)vv$ in the transaction since it is retired when paid off and no longer exists.