Bite-Size Learning 1: What are transactions?

In any transaction, there must be 2 parties. The giver and the receiver. This principle creates the accounting system where we need to explain what a business receives and where it comes from. For example, a business received cash of $10,000 from the owner as capital. Hence an equation can be formed.

What the business has ($10,000 cash) = Comes from the owner ($10000 capital)

Can simplified as:

Assets of $10,000 cash = Financed by Capital $10,000

Let's take this further. Perhaps what the owner contributes is not sufficient, hence the business may take a loan of $5,000 from bank.

Equation evolves to

Assets of ($15,000 cash) = Financed by ($10,000 capital) + ($5,000 loan)