The journal entry to record the transaction for the partnership is Debit Cash $14,000; debit Office Equipment $7,000; credit R Stetson, Capital $21,000.
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</h3><h3>What is a capital contribution?</h3>
A capital contribution is when one of the owners or partners gives money or other assets to a corporation or partnership. This is referred to as a capital contribution in business and partnership law. The owner's or partner's equity position in the company is increased by the capital input.
In business and partnership law, a contribution is referred to as a capital contribution, which is an amount of money or assets given to a corporation or partnership by one of the owners or partners.
An owner's or partner's an ownership interest in the company is increased by the capital investment. As part of the capital commitment, cash is not necessary. It might take the shape of an actual asset.
Journal entry:
Particulars Debit ($) Credit ($)
Cash $14,000
Office equipment $7,000
To R. Stetson, Capital $21,000
(To record R. Stetson's contribution)
Therefore, the correct answer is option a. Debit Cash $14,000; debit Office Equipment $7,000; credit R Stetson, Capital $21,000.
The complete question is:
R. Stetson contributed $14,000 in cash plus office equipment valued at $7,000 to the SJ Partnership. The journal entry to record the transaction for the partnership is:
a. Debit Cash $14,000; debit Office Equipment $7,000; credit R Stetson, Capital $21,000.
b. Debit Cash $14,000; debit Office Equipment $7,000; credit SJ Partnership, Capital $21,000.
c. Debit SJ Partnership $21,000; credit R. Stetson, Capital $21,000.
d. Debit R. Stetson, Capital $21,000; credit SJ Partnership, Capital $21,000.
e. Debit Cash $14,000; debit Office Equipment $7,000; credit Common Stock $21,000.
To learn more about capital contribution refer to:
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