Randy Stall invests $25,000 in cash in the company to start his own company.Randy Stall should:
A)debit Retained Earnings and credit Cash for $25,000.
B)debit Cash and credit Retained Earnings for $25,000.
C)debit Paid-in Capital and credit Retained Earnings for $25,000.
D)debit Paid-in Capital and debit Retained Earnings for $25,000.
E)debit Cash and credit Paid-in Capital for $25,000.

Question

Quizplus · Accepted Answer

Randy Stall's investment of $25,000 in cash is a contribution to the company's equity capital, which should be recorded in the Paid-in Capital account. Therefore, we should debit Cash and credit Paid-in Capital for $25,000. Option E correctly reflects this transaction.

Randy Stall Invests $25,000 in Cash in the Company to Start