Celery Company has assets of $1,000,000, liabilities of $100,000, and equity of $900,000. The company purchased the office insurance policy for a whole year (12-month period) and paid $120,000. What effect would this transaction have on the accounting equation?

Select one:

a. Assets decrease; Liabilities increase

b. Assets no change; Liabilities no change

c. Assets increase; Liabilities decrease

d. Assets increase; Liabilities no change