Question

On January 11,2018, Olivia and David organize as a partnership called the Landing Zone. Olivia’s initial...

On January 11,2018, Olivia and David organize as a partnership called the Landing Zone. Olivia’s initial net investment in The Landing Zone is $30,000, made up of $7,000 in cash, equipment with a fair value of $33,000, and a $10,000 note payable reflecting a bank loan for the business due in six months. David’s initial investment is cash of $10,000.
Record the entries in Journal.
Prepare balance sheet for the partnership.

Homework Answers

Answer #1

Journal Entries

Date Account title and explanation debit credit
Jan11 Cash $7,000
Equipment $33,000
Note payable $10,000
Olivia , capital $30,000
[To record capital investment from Olivia]
Jan11 Cash $10,000
David ,capital $10,000
[To record capital investment from David]

Balance sheet

Balance sheet
At January 2018
Assets Liabilities
Cash $17,000 Notes payable $10,000
Equipment $33,000
Equity:
Olivia,capital $30,000
David , capital $10,000
Total Assets $50,000 Total liabilities & Equity $50,000
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