Question

Joshua Scott invests $40,000 into his new business. How would this transaction be entered in the journal in good form? a. Joshua Scott, Loan40,000 Cash40,000 Invested cash in business. b. Cash40,000 Joshua Scott, Capital40,000 Invested cash in business. c. Joshua Scott, Capital40,000 Cash40,000 Invested cash in business. d. Cash40,000 Joshua Scott, Loan40,000 Invested cash in business.

Answer 1

Answer:

b. Cash40,000 Joshua Scott, Capital40,000 Invested cash in business

Explanation:

Investment made by Joshua Scott into the business will have the following effects:

- Cash will increase by $40,000.  

cash will be debited.

- Joshua Scott capital will increase.

Joshua's capital will be credited.

Therefore, The