dave krug contributed $2,900 cash along with inventory and land to a new partnership. the inventory had a…
dave krug contributed $2,900 cash along with inventory and land to a new partnership. the inventory had a market - value of $5,800. the land had a market value of $8,500. the partnership also accepted a $4,900 note payable owed by krug to a creditor. prepare the partnerships journal entry to record krugs investment.\njournal entry worksheet\nrecord the investment of krug.\nnote: enter debits before credits.\ntransaction general journal debit credit
Answer
Explanation:
Step1: Debit cash account
Debit Cash for the $2,900 cash contribution. So, Cash is debited for $2,900.
Step2: Debit inventory account
Debit Inventory for its market - value of $5,800. So, Inventory is debited for $5,800.
Step3: Debit land account
Debit Land for its market - value of $8,500. So, Land is debited for $8,500.
Step4: Credit note payable account
Credit Notes Payable for the $4,900 note payable the partnership is accepting. So, Notes Payable is credited for $4,900.
Step5: Credit partner's capital account
The partner's capital is the net amount of the assets contributed minus the liability assumed. The total assets contributed are $2,900 + $5,800+ $8,500=$17,200. After subtracting the $4,900 note payable, the credit to Krug's Capital is $17,200 - $4,900 = $12,300. So, Krug's Capital is credited for $12,300.
| Transaction | General Journal | Debit | Credit |
|---|---|---|---|
| 1 | Cash | $2,900 | |
| Inventory | $5,800 | ||
| Land | $8,500 | ||
| Notes Payable | $4,900 | ||
| Krug's Capital | $12,300 |
Answer:
| Transaction | General Journal | Debit | Credit |
|---|---|---|---|
| 1 | Cash | $2,900 | |
| Inventory | $5,800 | ||
| Land | $8,500 | ||
| Notes Payable | $4,900 | ||
| Krug's Capital | $12,300 |