What is the journal entry to record the initial capital contribution of a partner in a partnership?
Practice Questions
1 question
Q1
What is the journal entry to record the initial capital contribution of a partner in a partnership?
Debit Cash, Credit Partner's Capital Account
Debit Partner's Capital Account, Credit Cash
Debit Cash, Credit Income Account
Debit Partner's Capital Account, Credit Revenue
The correct entry is to debit Cash and credit the Partner's Capital Account to reflect the contribution.
Questions & Step-by-step Solutions
1 item
Q
Q: What is the journal entry to record the initial capital contribution of a partner in a partnership?
Solution: The correct entry is to debit Cash and credit the Partner's Capital Account to reflect the contribution.
Steps: 5
Step 1: Identify the amount of cash that the partner is contributing to the partnership.
Step 2: Open the accounting journal to record the transaction.
Step 3: Write a debit entry for the amount of cash contributed. This means you will increase the Cash account.
Step 4: Write a credit entry for the same amount in the Partner's Capital Account. This means you will increase the partner's equity in the partnership.
Step 5: Review the journal entry to ensure that the debit and credit amounts are equal.
