A Company Incurred $120,000 (To Be Paid Next Year) for the Current

Multiple Choice

A company incurred $120,000 (to be paid next year) for the current year's insurance coverage.
What would the effect of this transaction on the current year's accounting equation?

A) No effect on Assets; $120,000 decrease in Liabilities; $120,000 increase in Stockholders' Equity
B) $120,000 increase in Assets; $120,000 increase in Liabilities; No effect on Stockholders' Equity
C) $120,000 increase in Assets; No effect on Liabilities; $120,000 increase in Stockholders' Equity
D) No effect on Assets; $120,000 increase in Liabilities; $120,000 decrease in Stockholders' Equity