Question

J. Jackson invested $1,000 in his business in exchange for common stock. Show how to use T-accounts to record this transaction by selecting the correct answer below. Multiple choice question. Debit Investments; credit Cash. Debit Cash; credit Revenue. Credit Cash; debit Common stock Debit Cash; credit Common stock

Answer 1

Based on the information given the transaction will be recorded T-accounts as: Debit Cash; credit Common stock.

T-accounts:

Since $1,000 was invested  in the business in exchange for common stock which means that we are going to debit cash with the amount of $1,000 and credit common stock with the amount of $1,000.

Hence, the T-account will show:

Debit Cash $1,000

Credit Common stock $1,000

Inconclusion the transaction will be recorded T-accounts as: Debit Cash; credit Common stock.

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