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How would this transaction impact the accounting equation

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Question - Company B needed additional financing to grow its business, so it took out a loan from the local bank for $100,000 on March 1st. The bank requires that the principal amount of the loan will need to be repaid in two years, with interest due every six months.

How would this transaction impact the accounting equation of Company B on March 1st when it took out the loan?

1- Increase assets and increase liabilities

2- Increase assets and increase owners' equity

3- Increase liabilities and decrease owners' equity

4- Increase assets and decrease owners' equity

Reference no: EM132618881

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