If a company has excess space in its building that it rents to another company for $700, what is the effect on the accounting equation when the first rent payment is collected?

Assets would decrease $700 and liabilities would decrease $700.

Assets would decrease $700 and equity would increase $700.

Assets would increase $700 and equity would decrease $700.

Assets would increase $700 and equity would increase $700.

Liabilities would decrease $700 and equity would increase $700.