If a company purchases equipment costing $4,500 on credit, the effect on the accounting equation would be:
A. One asset increases $4,500 and another asset decreases $4,500.
B. Assets increase $4,500 and liabilities decrease $4,500.
C. Assets increase $4,500 and liabilities increase $4,500.
D. Equity increases $4,500 and liabilities decrease $4,500.
E. Equity decreases $4,500 and liabilities increase $4,500.
Answer: C
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