Company Baldwin invested $58,760,000 in plant and equipment last year. The plant investment was funded with bonds at a face value of $37,378,448 at 13.6% interest, and equity of $21,381,552. Depreciation is 15 years straight line. For this transaction alone which of the following statements are true?
Cash went up when the Bond was issued by $37,378,448.
Cash went down by $58,760,000 when the plant was purchased.
On the Balance sheet, Long Term Debt changed by $37,378,448.
Since the new plant was funded with debt and equity, on the Balance sheet Retained Earnings decreased by $21,381,552, the difference between the investment $58,760,000 and the bond $37,378,448.
Cash was pulled from retained earnings to cover the $21,381,552 difference between the plant purchase and bond issue.
On the Balance sheet, Plant & Equipment increased by $58,760,000.
Buying the plant had no net effect on the Cash account, because the plant was paid for by the bond plus retained earnings.
Depreciation increased by $3,917,333.