The company's assets will rise by $500,000 while its liabilities will rise by $500,000.
What is accounting equation?
The accounting equation is the assets that are equivalent to the liabilities & equity, and the same should be shown in the balance sheet.
The accounting equation is given as:
Assets = Owner's equity + liability
The asset will rise because the company is purchasing new products, also the liability will rise because of the loan taken to purchase the asset.
Hence, the company's assets will rise by $500,000 while its liabilities will rise by $500,000.
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