Question

D. Xavier contributed $15,000 in cash plus office furniture valued at $9,000 to the FX Partnership. The journal entry to record the transaction for this newly formed partnership is _____.
1. debit Cash, $15,000; debit Office Furniture, $9,000; credit D. Xavier, Capital, $24,000
2. debit Cash, $15,000; debit Office Furniture, $9,000; credit FX Partnership, Capital, $24,000
3. debit FX Partnership, $24,000; credit D. Xavier, Capital, $24,000
4. debit D. Xavier, Capital, $24,000; credit FX Partnership, Capital, $24,000

Answer 1

Answer: 2.  debit Cash, $15,000; debit Office Furniture, $9,000; credit FX Partnership, Capital, $24,000

Explanation: From the above question, the partnership capital account will be credit as this will be the partnership capital contribution.

Each partner is to contribute something into the partnership business to start up the business and the contribution is called capital contribution.

Any other transaction that has to do with any of the partners will be recorded in the partners current account.