Suppose that Wells Fargo lends

$454,000

to Jamal's Jerseys. Using T-accounts, show how this transaction is recorded on the bank's balance sheet.

(Enter your responses as an integer. Include a minus sign to indicate a negative change, but do not include a plus sign for a positive change.)

Wells Fargo

Assets		Liabilities
Loans	enter here	Checkable deposits	enter here

Part 2

If Jamal's spends the money to buy materials from Zach's Zippers, which has its checking account at PNC Bank, show the effect on Wells Fargo's balance sheet.

(Enter your responses as an integer. Include a minus sign to indicate a negative change, but do not include a plus sign for a positive change.)

Wells Fargo

Assets		Liabilities
Reserves	enter here	Checkable deposits	enter here

Part 3

What is the total change in Wells Fargo's assets and liabilities?

A. The total change in assets is zero, with a loss of $454,000 in loans and an additional $454,000 of reserves. The total change in liabilities is $454,000.

B. The total change in assets is zero, with an additional $454,000 in loans and a loss of $454,000 of reserves. The total change in liabilities is zero, with the $454,000 checking account being spent.

C. The total change in assets is zero, with an additional $454,000 in loans and a loss of $454,000 of reserves. The total change in liabilities is $454,000.

D. The total change in assets is zero, with a loss of $454,000 in loans and an additional $454,000 of reserves. The total change in liabilities is zero, with the $454,000 checking account being spent.