The Free Market Center
The Free Market Center
Your neighbor wants to borrow 800 bushels of wheat. In order to make that loan you must first assure that you have that much wheat on hand.
Through the magic of a hypothetical situation you happen to have exactly 800 bushels of wheat. Because you expect that your neighbor will pay you back, you decide to make the loan.
Note: In the next couple of pages the explanation of the transaction follows the chart.
The next page shows the accounts in which we will record the transaction before you make the loan.
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