Question:

You're accounting for a partnership:

1. The General Partner buys a 10-year note from the Partnership $100,000, 5% per annum.

2. With that cash, the partnership buys a 10-year note from the General Partner $100,000, 5% per annum.

3. With that cash, General Partner buys a 10-year note from the Partnership $100,000, 5% per annum.

4. With that cash, the partnership buys a 10-year note from the General Partner $100,000, 5% per annum.

5. With that cash, the General Partner buys a 10-year note from the partnership $100,000, 5% per annum.

6. With that cash, the partnership buys a 10-year note from the General Partner $100,000, 5% per annum.

Could the partnership increase both notes receivable AND notes payable accounts through these transactions? I understand net asset values have not changed. I don't understand if the partnership could loan to and from the General Partner, thereby increasing its assets and liabilities? Rather than using cash to pay back the loans payable (a liability) -- could the partnership credit cash and debit account receivable?