Final answer:
The owner's contribution of a sofa and coffee table worth $8,500 to the business is an increase in furniture assets and owner's equity, recorded on the balance sheet, not affecting the income statement.
Step-by-step explanation:
The question presented asks about the accounting treatment for the contribution of a sofa and coffee table worth $8,500 to the business by the owner. In accounting, this kind of transaction is treated as a contribution of capital, which is recorded on the business's balance sheet.
The business will increase its furniture assets by $8,500, and simultaneously, the owner's equity will also increase by the same amount. This transaction does not affect the income statement as it is not an expense but an investment in the company made by the owner.
In this question, the subject is Business. The owner contributed additional sofa and coffee table worth $8,500 into the business. This means that the owner added these items to the business's assets, increasing the overall value of the business by $8,500.