Question

Moss and Barber organize a partnership on January 1. Moss’s initial net investment is $75,000, consisting of cash ($17,500), equipment ($82,500), and a note payable reflecting a bank loan for the new business ($25,000). Barber’s initial investment is cash of $31,250.

Prepare journal entries to record
(1) Moss’s investment and
(2) Barber’s investment.

Answer 1

journal entries are as given below

Step-by-step explanation:

solution

journal entries are as

first we get here investment by Moss

date account title debit credit

January 01 cash $17500

equipment $82500

note payable $25000

Angela Moss capital $75000

and now we get investment by barber

date account title debit credit

January 01 cash $31250

autumn barber capital $31250