Lemonade Stand and the Accounting Equation
Recalling the lemonade stand (see Chapter 5), you opened a business checking account, into which you put $100 of your own money and borrowed $50 from the bank, which agreed to lend it to you at a 10% annual interest rate.
At its inception on January 1, 2005, what are the lemonade stand’s assets (resources) and how were those assets funded (liabilities and shareholders’ equity)?
| Assets | = | Total cash available to the business | = | $150 |
| Liabilities | = | Bank loan | = | $50 |
| Shareholders’ equity (SE) | = | Your own money | = | $100 |
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