Amanda Company purchased a computer that cost $12,000. It had an estimated useful life of three years and a residual value of $2,000. The computer was depreciated by the straight-line method and was sold at the end of the third year of use for $5,920 cash. Which of the following statements correctly describes the computer sale?

Assets and stockholders equity both decrease by $3,920.

Assets decrease $5,920 and stockholders equity is not affected.

Assets and stockholders equity both increase by $5,920.

Assets and stockholders equity both increase by $3,920.