What is the journal entry to record the admission of a new partner?

₹0.0

Question: What is the journal entry to record the admission of a new partner?

Options:

Correct Answer: Debit Cash, Credit Capital Account

Solution:

When a new partner is admitted, the cash contributed by the new partner is debited to the cash account and credited to the capital account.

What is the journal entry to record the admission of a new partner?

What is the journal entry to record the admission of a new partner?

Step 1: Identify the amount of cash the new partner is contributing to the partnership.
Step 2: Open your accounting journal to record the transaction.
Step 3: Write a debit entry for the cash account with the amount contributed by the new partner. This shows that cash is increasing.
Step 4: Write a credit entry for the capital account of the new partner with the same amount. This shows that the new partner's equity in the partnership is increasing.
Step 5: Review the journal entry to ensure that the debit and credit amounts are equal.

No concepts available.