How to record capital of a business when it came from a loan?

Instead of recognizing it as debit Cash and credit capital, how to recognize the loan?

How to record capital of a business when it came from a loan?
The recording is simple: You debit the liability account and credit the capital account. This may or may not be legitimate. For example, let's say a shareholder has loaned his corporation money, which is recorded as a liability. Later the shareholder and the company agree that instead of repaying the loan, the company will issue additional stock to the shareholder. This would be a legitimate transaction in which capital is increased in exchange for a liability. This arrangement could take place between other lenders who are willing to accept stock in exchange for their loan.
Reply:As I understand it - You debit cash and credit Liabilities - Loan account. Capital is what YOU put into your business.