What to do when you catch your child and another child playing inappropriately

Hey guys! I need a little advice. My 4 year old son and my friends son who will be 7 years old this month are the best of friends! They are very close and play really well together. Well today I had my friend’s son over for a play date and I caught them inside of my sons play tent acting inappropriately. They were being awfully quiet while I was in the kitchen cooking lunch so I decided to be check on them. I quietly walked into the living room and I saw that the tent had a blanket covering the opening. I heard my friends son say to my son “do you like that”. I instantly pulled the blanket off of the tent and my son was sitting on his lap with his pants pulled down! They both jumped up when they saw me and the 7 year old said “he pulled his pants down on his own” before I could even say anything. I was obviously flustered with emotions because I never caught them doing anything like that before. I separated the two of them and told my friends son that it was time to leave. I made my brother in law take him home. I had a little talk with my son telling him that his private parts are only for him to see and to never let anyone make him pull his pants down. My husband had a talk with him too and told him to explain everything. I can not stop thinking about it and I don’t know if I should tell my friend what happened. I don’t know how I would even say it! I don’t want to come off as if I’m accusing her son of anything but I don’t want them having anymore play dates for a while. What would you do?

UPDATE:

My friend invited us all over the next day for her sons’s birthday. My husband and I really didn’t want to go because of what took place the day before. It was awkward for me because I wanted to tell her so bad but I didn’t want to ruin her son’s birthday party. I would rather tell her in person instead of over the phone but I haven’t gotten the chance. My husband is also good friends with her husband so he said he’ll talk to him. I’ll probably just end up calling her because I’m not sure when we’ll all meet up again. I am still very upset about it.