Slappey Communications is a technology firm in Birmingham, Alabama, specializing in telecommunications, computer, and network security. Its owner, Bill Slappey, invested nearly $770,000 in property, plant, and equipment for the business in 2014 (See Small Firms Poised to Spend More on Plants, Equipment, A. Loten and V. Monga, Wall Street Journal, September 3, 2014.)

Slappey spent about $100,000 to build a 1,000-square-foot cloud storage room, or a warehouse for network servers. Slappey also spent about $670,000 on computers, servers, and other hardware.

Funding for the 2014 investment in the warehouse and computer hardware came from two sources. According to the September 3, 2014, Wall Street Journal article, Slappey borrowed about $385,000 and .used its earnings to fund the rest.

Questions

Assume that Slappey borrowed the funds for the cloud storage room by signing a long-term note. What impact, if any, would this investment have on Slappeys assets, liabilities, and equity?