A company purchased a new cash register in exchange for a cash payment of 1,200. The company recorded only an increase of 1,200 in the Equipment account. No entry was made to the Cash account. As a result, What will be the impact on the company's financial statements?
1) The company's cash balance will be overstated.
2) The company's cash balance will be understated.
3) The company's equipment balance will be overstated.
4) The company's equipment balance will be understated.