When a Company Accepts a Note in Settlement of a Past

When a company accepts a note in settlement of a past due account, the effect on the accounting equation is

A) an increase in a liability and a decrease in an asset
B) an increase in an asset and a decrease in an asset
C) a decrease in an asset and a decrease in stockholders' equity (expense)
D) a decrease in a liability and an increase in stockholders' equity (revenue)

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