Transaction analysis results in the development of a journal entry

1)

The journal entry for the given transaction will be:

Cash a/c Dr............... $750,000

To, Capital a/c...........................$750,000

Here, the assets account i.e cash a/c $750,000 will be debited and the capital account will be credited by $750,000.

2)

The Accounting Equation:

Assets = Liabilities + Capital

The impact will be:

• Assets will be increased by $750,000 as cash is the assets.
• No changes in liabilities.
• There will be an increase in the capital account by $750,000.

At last, the accounting equation must be balanced.

Hence the accounting equation will be:

$750,000 = $0 + $750,000.