moss and barber organize a partnership on january 1. mosss initial net investment is $90,000, consisting of…
moss and barber organize a partnership on january 1. mosss initial net investment is $90,000, consisting of cash ($29,000), equipment ($73,000), and a note payable reflecting a bank loan for the new business ($12,000). barbers initial investment is cash of $34,000. prepare journal entries to record (1) mosss investment and (2) barbers investment. view transaction list journal entry worksheet record the initial investment of moss. note: enter debits before credits. transaction general journal debit credit (1)
Answer
Explanation:
Step1: Record Moss's investment
Debit cash for the amount of cash contributed, debit equipment for the value of equipment contributed, and credit the partner's capital account for the net - investment. Also, credit note payable for the bank loan.
| General Journal | Debit | Credit |
|---|---|---|
| Cash | $29,000 | |
| Equipment | $73,000 | |
| Moss, Capital | $90,000 | |
| Note Payable | $12,000 |
Step2: Record Barber's investment
Debit cash for the amount of cash contributed and credit the partner's capital account.
| General Journal | Debit | Credit |
|---|---|---|
| Cash | $34,000 | |
| Barber, Capital | $34,000 |
Answer:
(1)
| General Journal | Debit | Credit |
|---|---|---|
| Cash | $29,000 | |
| Equipment | $73,000 | |
| Moss, Capital | $90,000 | |
| Note Payable | $12,000 | |
| (2) | ||
| General Journal | Debit | Credit |
| ---- | ---- | ---- |
| Cash | $34,000 | |
| Barber, Capital | $34,000 |