Accountancy, asked by Deval8238, 11 months ago

Fresh capital invested what will be journal entry

Answers

Answered by Anonymous
2

Answer:

When an owner makes an investment into the business, whether it’s cash, equipment, or whatever, you’d debit what the owner put in. And credit Capital or Capital Stock depending upon what kind of organizational structure the business happens to be.

For example, let’s say it’s a sole-proprietorship and the owner put in $100k in cash. The entry would be a $100,000 debit to Cash and a $100,000 credit to Capital. If this person put in $90,000 in cash and $10,000 in equipment, the entry would be to debit Cash for $90,000 and debit Equipment for $10,000, and credit Capital for $100,000.

So we do have to separate out on the debit side what kind of investment the owner is making.

Explanation:

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