Bloom and Plant organize a partnership on January 1.Bloom's initial investment consists of $800 cash,$1,700 equipment and a $500 note payable reflecting a bank loan for the new business.Plant's initial investment is cash of $2,000.These amounts are the values agreed on by both partners.The journal entry to record Bloom's investment is:
A)Debit Cash $800;debit Equipment $1,700;credit Note Payable $500;credit Bloom,Capital $2,000.
B)Debit Cash $2,000;credit Bloom,Capital $2,000.
C)Debit Cash $800;debit Equipment $1,700;credit Bloom,Capital $2,500.
D)Debit Cash $800;debit Equipment $1,200;credit Bloom,Capital $2,000.
E)Debit Bloom,Capital $3,000;credit Common Stock $3,000.

Question

Quizplus · Accepted Answer

Bloom contributed $800 cash and $1,700 equipment, which are debited to Cash and Equipment accounts, respectively. The Note Payable of $500 is credited, and Bloom's Capital account is credited for the total contribution of $2,500.

Bloom and Plant Organize a Partnership on January 1