here is the scenario--a company makes a cash purchase for a building site. So this is posted as a decrease to cash and an increase to the land account--not really affecting the total assets of the company.

So here is the question--what if the land is worth higher than the cash paid--for instance the cost of the land was $800, but the actual value of the land is $1200. Since we would want to show the actual value of the land in the company's assets, where would you post the additional $400 to ensure the accounting equation is balanced?