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David and Daniel formed a partnership. David invested $10,000 in cash; Daniel invested $5,000 in cash and equipment valued at $6,000. The proper entry to record this is which of the following?

User Chavon
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Answer:

Debit Cash $15,000, debit Equipment $6,000, credit David's Capital $10,000 and credit Daniel's Capital $11,000

Step-by-step explanation:

Contribution of capital by partners will result in an increase in cash balance as indicated by a debit to cash account. Similarly, contribution of equipment will again be indicated by a debit to equipment account as it would result in the creation/increase in the value of an asset (equipment account). The capital contributed by both partner's will be reported in their capital accounts respectively as indicated by a credit to David and Daniel Capital accounts. Cash and equipment will be reported on the asset side of the balance sheet and capital accounts will get reported on the liabilities of the balance sheet of the partnership firm.

User Wilner
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