If a company purchases equipment worth \$50,000 by taking a loan, how does this transaction affect the fundamental accounting equation?

• A. Assets increase by \$50,000; Liabilities remain unchanged; Equity increases by \$50,000.
• B. Assets remain unchanged; Liabilities increase by \$50,000; Equity increases by \$50,000.
• C. Assets increase by \$50,000; Liabilities decrease by \$50,000; Equity remains unchanged.
• D. Assets increase by \$50,000; Liabilities increase by \$50,000; Equity remains unchanged.

Answer: (D)