Question

Geraldine Parker, the owner of Gi Grs Dance Studio, Inc., started the business by investing $10,000 cash and donating a building worth $20,000. Identfy the general jourmal entry below that Gi Gřs will make to record the transaction. A. Cash 30. Common Stock 0,000 B. Common Stock 30 Cash 10,000 Building 20,000 C. Cash 10,000 Building 20.000 Common Stock D. Common S Stock 30,000 Retained Eamings E. Cash & Builing 30,000 Common Stock 30,000

Answer 1

Answer:

C. Cash 10,000 Building 20.000 Common Stock 30,000

Explanation:

To record the journal entry for investing cash in a business in exchange for common stock and a building to start the business,

Debit                  Cash                     $10,000

Debit                  Building                $20,000

Credit                 Common Stock    $30,000

Therefore, Gi Grs Dance Studio, Inc. invested cash in exchange for common stock as well as donated a building for business. In that case, two asset accounts increases, and an equity account establishes.