Richard Redden contributed $70,000 in cash and land worth $130,000 to open a new business,RR Consulting.Which of the following general journal entries will RR Consulting make to record this transaction?
A)Debit Assets $200,000;credit Redden,Capital,$200,000.
B)Debit Cash and Land,$200,000;credit Redden,Capital,$200,000.
C)Debit Cash $70,000;debit Land $130,000;credit Redden,Capital,$200,000.
D)Debit Redden,Capital,$200,000;credit Cash $70,000,credit Land,$130,000.
E)Debit Redden,Capital,$200,000;credit Assets,$200,000.

Question

Quizplus · Accepted Answer

The transaction involves contribution of both cash and land, so both assets need to be recorded separately. The correct journal entry would be to debit Cash for $70,000, debit Land for $130,000, and credit Redden, Capital for $200,000, as shown in choice C.

Richard Redden Contributed $70,000 in Cash and Land Worth $130,000