Joe Brown invests $10,000 into his new business. How would the journal entry for this transaction be entered in the journal?
Cash 10,000
Brown, Capital 10,000
Invested cash in business
Cash 10,000
Brown, Capital 10,000
Invested cash in business
Brown, Capital 10,000
Cash 10,000
Invested cash in business
Brown, Capital 10,000
Cash 10,000
Invested cash in business
Cash 10,000 debit
Brown, Equity 10,000 credit
invested cash business
The correct journal entry for Joe Brown's investment of $10,000 into his new business would be:
Cash 10,000
Brown, Capital 10,000
Invested cash in business
The correct journal entry for Joe Brown's investment of $10,000 into his new business would be:
Cash 10,000
Brown, Capital 10,000
(Invested cash in business)
Explanation:
1. Identify the accounts involved: The two accounts involved in this transaction are Cash and Brown, Capital.
2. Determine the account to be debited: In this case, Cash is increasing with the investment, so we would debit the Cash account.
3. Determine the account to be credited: Since Joe Brown is investing his own funds into the business, the capital account, Brown, Capital, will be credited.
4. Determine the amounts: The investment amount is $10,000, so we would record that amount in both the debit and credit parts of the journal entry.
5. Add a brief description: In parentheses, include a brief description of the transaction, such as "Invested cash in business."
Based on these steps, the correct journal entry is:
Cash 10,000
Brown, Capital 10,000
(Invested cash in business)