Question

I am creating a General Journal for an accounting project. One of the posts i need to make says: You deposited $26,375 into a bank account in the name of the business, and also, your personal computer, printer, and scanner (Office Equipment) in the business with a fair market value. I am not sure if I make the first entry with the $26, 375 and debit cash and credit capital and then make a second entry for the office equipment? I am not sure what the credit post is for the office equipment since it was already owned.

Answer 1

I believe here 'You' means the owner of the business so the accounting entry should be as below:

1. Dr Cash 26375

Cr Owner's Equity 26375

2. Dr Bank 26375

Cr Cash 26375

As you have deposited the office equipment in the business at fair value and not taken any cash for it the fair value amount should be credited to the owner's equity. Say for example the fair value of the items is 500 USD. THe accounting will be

3. Dr Office Equipment 500

Cr Owner's Equity 500