The management of a firm determine that they need to acquire additional equipment costing $10,000,000. The firms current B/S is below (in thousands).

Assets		Liabilities
Cash	$2,000	Accounts Payable	$5,000
Accounts Receivable	3,000	Salary Payable	10,000
Supplies	2,000	Current Liabilities	15,000
Prepaid Rent	2,000	Long-term Note	12,000
Current Assets	9,000	Total Liabilities	27,000
Equipment	25,000	Equity
Less A/D	(5,000)	Contributed Capital	5,000
Building	10,000	Retained Earnings	6,000
Less A/D	(1,000)	Total Equity	11,000
Long-term Assets	29,000
Total Assets	$38,000	Liabilities & Equity	$38,000

Question:

The firm is considering several options to purchase the equipment: paying $2,000,000 in cash and creating a notes payable of $8,000,000 that they must repay in a year; or, taking out a 5 year loan from the bank for the $10,000,000. Ignoring the cost of interest, how would each option affect the balance sheet? Which option would you recommend management pursue? Is there enough information available to create an income statement?