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What would be effects of transaction on accounting equation

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Reference no: EM133010655

Problem 1: Saddleback Company paid off $39,000 of its accounts payable in cash. What would be the effects of this transaction on the accounting equation?

Multiple Choice

Option 1: Assets, $39,000 decrease; equity $39,000 decrease.
Option 2: Liabilities, $39,000 decrease; equity, $39,000 increase.
Option 3: Assets, $39,000 decrease; liabilities, $39,000 increase.
Option 4: Assets, $39,000 decrease; liabilities, $39,000 decrease.
Option 5: Assets, $39,000 increase; equity, $39,000 increase.

Reference no: EM133010655

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