I'm not sure what type of account software you are using, but the accounting entry is to debit the inventory account and credit the capital (contribution) account for the value of the inventory you are putting into the business.
The inventory is an asset, just like cash is an asset. So if you open a bank account and put in 5,000 cash that would be your starting contribution to the business. Inventory is the same way, just a sub category of asset.
Gaap and tax accounting are not always the same.
Assuming your using a schedule C for tax purposes and no additional purchases after you start your business (just to make this easier on the example), you'll record the sales for the year and then the cost of those sales(cost of goods sold) to determine the gross profit. Then you subtract operating expenses. If you put in 5,000 of inventory and sold half of it you would put 2500 as your cost of goods sold. If you sold that inventory for 3200 you would have gross profit of 700. Then you add up all of your other business expenses to subtract from the gross profit. You would still have 2500 left in your inventory for the next year from your "seed".