Alpha Company has assets of $600,000, liabilities of $250,000, and equity of $350,000. It buys office equipment on credit for $75,000. What would be the effects of this transaction on the accounting equation?

Assets increase by $75,000 and expenses decrease by $75,000.

Assets decrease by $75,000 and expenses decrease by $75,000.

Assets increase by $75,000 and liabilities increase by $75,000.

Assets increase by $75,000 and expenses increase by $75,000.

Liabilities increase by $75,000 and expenses decrease by $75,000.