What is the effect of the following transaction on the basic accounting equation? Paid your phone bill for $120 plus HST. 1) Assets decrease, liabilities decrease. O 2) Assets increase, liabilities increase. 3) Liabilities decrease, owners' equity increases. ( 4) Assets increase, owners' equity increases. ( 5) Liabilities increase, owners' equity decreases. 6) Assets decrease, owners' equity decreases. ( 7) No entry, no effect. ( 8) Assets increase, assets decrease