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

Answer:

journal entries are as given below

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