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.
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 |
Get Answers For Free
Most questions answered within 1 hours.