P. Baker deposits $10,000 in a bank account, in the name of his business, to be used to purchase equipment. The journal entry to record the transaction would involve a:
A) credit to Equipment.
B) credit to Cash.
C) credit to P. Baker, Capital.
D) credit to P. Baker, Drawing.

Question

Quizplus · Accepted Answer

When P. Baker deposits $10,000 into a bank account for his business, it increases the business's assets (cash) and also increases the owner's equity (P. Baker, Capital) because it represents an investment into the business by the owner.

P Baker Deposits $10,000 in a Bank Account, in the Name