Question

Manuel and Jones operate a partnership with beginning-year capital balances of $50,000 each. During the year, Santiago joins the partnership by investing $20,000 cash. The journal entry to record Santiago's contribution would include a credit of how much and to wh

Answer 1

Complete Question:

Manuel and Jones operate a partnership with beginning-year capital balances of $50,000 each. During the year, Santiago joins the partnership by investing $20,000 cash. The journal entry to record Santiago's contribution would include a credit of how much and to which account?

Answer:

The journal entry would include a credit of $20,000 to Santiago's account

Explanation:

A partnership is a company that is owned by two or more people. These partners contribute the capitals for starting the business and direct the affairs of the business together.

Journal entry helps to keep record of business transactions. The journal entry shows the credit and debit balances of the firm.

Since Santiago is a new member investing a cash of $20,000 and there must be a proper record of the amount invested by each partner to the company, the journal entry would include a credit of $20,000 to Santiago's account