The Demand Company buys $30,000 of equipment and funds half the purchase through liquidating common shares that it owns,while incurring an informal promise to pay the remainder at the end of the month.What is the impact of this transaction on the basic accounting equation?

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This transaction impacts both sides of the basic accounting equation. The left-hand side (assets) increases by $30,000 from the purchase of equipment, and the right-hand side (liabilities and equity) also increases by $30,000 from the issuance of common shares and the informal promise to pay the remaining amount at the end of the month. Both sides are impacted and the right-hand side equals the left-hand side.

The Demand Company Buys $30,000 of Equipment and Funds Half