HVG, LLC paid $12,000 of cash to a real estate company upon signing a lease on 31 December 2005. Th e payment represents a $4,000 security deposit and $4,000 of rent for each of January 2006 and February 2006. Assuming that the correct accounting is to refl ect both January and February rent as prepaid, the most likely eff ect on HVG’s accounting equation in December 2005 is:

A. no net change in assets.

B. a decrease in assets of $8,000.

C. a decrease in assets of $12,000.