If a company receives $13,500 from the stockholders to establish a corporation, the effect on the accounting equation would be:

If a company receives $13,500 from the stockholders to establish a corporation, the effect on the accounting equation would be:

Assets decrease $13,500 and equity decreases $13,500.

Assets increase $13,500 and liabilities decrease $13,500.

Assets increase $13,500 and liabilities increase $13,500.

Liabilities increase $13,500 and equity decreases $13,500.

Assets increase $13,500 and equity increases $13,500.

Answer
Assets increase $13,500 and equity increases $13,500.