In October, your company prepays rent of $7,000 for November and December. Which of the following describes the effects of this transaction in October?

Group of answer choices

Assets, liabilities and shareholders' equity all remain unchanged.

Assets decrease $7,000 and liabilities decrease $7,000.

Assets increase $7,000 and shareholders' equity increases $7,000.

Liabilities decrease $7,000 and shareholders' equity increases $7,000.