i. contributes $1,000 cash in exchange for 10 common shares to start of a business what would be the journal entry for this
Thank you
To record the contribution of $1,000 cash in exchange for 10 common shares in the business, you would make the following journal entry:
Debit: Cash $1,000
Credit: Common Shares $1,000
Explanation:
1. Debiting the Cash account reflects the inflow of $1,000 cash into the business.
2. Crediting the Common Shares account represents the issuance of 10 common shares in exchange for the cash contribution.
Note: The Common Shares account is a part of the shareholders' equity section of the balance sheet, representing the ownership stake of the shareholders in the company.