Oh, for this: "is my example of 20k, 1k goes to stock, 19k goes to additional paid in capital right?"

No. You are posting Equity and Equity. If I understand everything you wrote so far, you are mixing up that $20,000 that is Expense.

"He depreciates the $100,000 by taking $20,000 per year."

On the P&L, the same as Rent Expense or Office Supplies = Depreciation Expense. I teach this as: "Not real dollars that reflect the loss or wear and tear on the value of the Asset over time per the IRS definition of that useful life."

"On the balance sheet, after the first year it shows $80,000 of assets. However, the equity shows $100,000 of additional paid in capital. It's out of balance."

The Equity is going to be effected by Net Income(Loss) from Operations. The $20,000 Expense is part of Operations.