Commercial bank balance sheet after Fed purchases $10 million in Treasury Bonds Suppose the Fed conducts an open market purchase by buying $10 million in Treasury bonds from Acme Bank. Sketch out the balance sheet changes that will occur as Acme converts the bond sale proceeds to new loans. The initial Acme bank balance sheet contains the following information: Assets – reserves 30, bonds 50, and loans 50; Liabilities – deposits 300 and equity 30.
The sale of the bonds (assets) will only affect the assets-side of the balance sheet.

If Acme bank did not lend out the money, your “bonds” would go 50-10 = 40. And your cash would go 0+10 = 10.

If they lend out the money, bonds still go to 40 and lending goes up by 10, so 50+10 = 60.