If a company purchases equipment costing $3500 on credit, the effect on the accounting equation would be:
A. Assets increase $3500 and liabilities decrease $3500.
B. Equity decreases $3500 and liabilities increase $3500.
C. Equity increases $3500 and liabilities decrease $3500.
D. Assets increase $3500 and liabilities increase $3500.
E. Liabilities decrease $3500 and assets increase $3500.
Answer: D
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