Many times junk bonds are a high risk bond, but are also a high return. They are more popular during a bear market for this reason only. Sine they have a high return it compensates for the high risk. The junk bonds can also help a persons personal portfolio. Junk bonds also issues with a 10 year term or less. A bear market is when there is a steady drop or stagnation in the market over a period of time.
Answer:
(B) Increase both assets and equity by $180
Explanation:
The transaction analysis model tells us that:
Assets = Liabilities + Owner's Equity
Owner's equity = Contributed Capital + Retained Earnings
Retained Earnings = Net Income − Dividends
and
Net Income = Income − Expenses
The expanded accounting equation is obtain if all substitutions are made:
Asset = Liabilities + Contributed Capital + Income – Expenses − Dividends
In the Global Cleaning Service`s case:
Assets are increased either because the service is collected or is an account receivable. As the service provided is a revenue (income) is part of the Owner's Equity that also increase. Both, Asset and Owner's Equity, increase in 180.
