Saddleback Company paid off $37,000 of its accounts payable in cash. What would be the effects of this transaction on the accounting equation?
Multiple Choice
Liabilities decrease $37,000; equity increases $37,000.
Assets decrease $37,000; equity decreases $37,000.
Assets decrease $37,000; liabilities decrease $37,000.
Assets increase $37,000; equity increases $37,000.
Assets decrease $37,000; liabilities increase $37,000.