According to the Accounting Principles, even the owner must pay back the amount of money he/she has borrowed from the business. What happens to the fundamental accounting equation (A=L+E) of a company when the owner pays his personal loan (=borrowed from the company) back to the business? (The borrowing transaction has been recorded correctly.) Assets increase, liabilities decrease, and owner' equity also increases. Assets remain the same, liabilities decrease, and owners' equity increases. Assets increase, liablitities decrease, and owners' equity remains the same. One account of assets increases, and another account of assets decreases. Liabilities and owners equity remain the same