If a company receives $12,000 from its sole stockholder to establish a corporation, the effect on the accounting equation would be:
A. Liabilities increase $12,000 and equity decreases $12,000.
B. Assets increase $12,000 and equity increases $12,000.
C. Assets decrease $12,000 and equity decreases $12,000.
D. Assets increase $12,000 and liabilities increase $12,000.
E. Assets increase $12,000 and liabilities decrease $12,000.
Answer: B
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