Question

Bloom and Plant organize a partnership on January 1. Bloom's initial investment consists of $800 cash, $1,700 equipment and a $500 note payable reflecting a bank loan for the new business. Plant's initial investment is cash of $2,000. These amounts are the values agreed on by both partners. The journal entry to record Bloom's investment is:

Answer 1

Answer and Explanation:

The journal entry to record the investment of Bloom is as follows:

Cash Dr $2,000

To Capital $2,000

(Being the investment is recorded)

Here the cash is debited as it increased the asset and capital is credited as it also increased the equity