A company borrows $2 million from its bank It then uses this money to buy equipment. How do these two transactions affect the company's accounting equation? Assets and liabilties both increase by $2 million. Assets increase by $2 million and liabilities decrease by $2 million. Assets increase by $4 million, liabilities increase by $2 million, and stockholders' equity increases by $2 million Assets remain unchanged and liabilities increase by $2 million