When the business issues stock, stockholders purchase prevalent inventory, yielding the next frequent inventory determine than prior to issuance. The widespread inventory account is growing and affects equity. Considering the expanded accounting equation, we see that Popular Inventory will increase to the credit side.
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Journal entries are recorded within the "journal", often called "textbooks of initial entry". A journal entry is made up of at the least a person account that's debited and at the least one account credited.
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