The accounting equation is Assets = Liabilities + Equity. If capital stock is issued for cash, it impacts both sides of the accounting equations. First, since the company is receiving cash, assets will increase by the amount of cash raised via the capital raise. Next, since the company is issued stock (equity) and not debt, this impacts equity on the right side of the equation. This will increase the contributed capital account in equity. Both assets and equity will increase by the same amount, so the accounting equation balances. It does not impact liabilities.