What is the journal entry to record the initial capital contribution of a partne

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Question: What is the journal entry to record the initial capital contribution of a partner?

Options:

Correct Answer: Debit Cash, Credit Capital Account

Solution:

The correct entry is to debit Cash and credit the Capital Account to reflect the partner\'s contribution.

What is the journal entry to record the initial capital contribution of a partner?

What is the journal entry to record the initial capital contribution of a partner?

Step 1: Identify the amount of cash the partner is contributing to the business.
Step 2: Open your accounting journal to record the transaction.
Step 3: Write a debit entry for the Cash account for the amount contributed. This shows that cash is increasing.
Step 4: Write a credit entry for the Capital Account for the same amount. This shows that the partner's equity in the business is increasing.
Step 5: Make sure both entries are for the same amount to keep the accounting equation balanced.

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