I have a couple of business questions I need some help on?
Answer:
debt investment is an investment that is done that creates a debt and interest etc must be paid on it. Also it is usually paid back at the end of a loan period. Investment equity is usually permanent and does not normally need payments made on it (dividends may be required in some circumstances). The effect on the financial statements are - balance sheet: increase in cash plus increase in liabilities for debt investment. Increase in cash and increase in owner equity for an equity investment . Income statement would reflect tax deductible interest with a debt investment and no effect from an equity investment. Other Questions and Answers: