On July 1, 2012, Watson Company received a $20,000 promissory note for services from Jeffs Company. The annual interest rate is 5%. Principal and interest are paid in cash at the maturity date of June 30, 2013. The effect on Watson's financial statements on July 1, 2012 is as follows.

		Assets increase; owners' equity increases.
		Assets decrease and owners' equity decreases.
		Assets decrease.
		No net change in assets.