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

Question

Quizplus · Accepted Answer

The transaction involves both cash and land, and each of these amounts needs to be recorded separately. Therefore, choice C, which debits cash and land and credits Haddon, Capital for the total value of $200,000, is the most appropriate entry. Choices A and E are incorrect because they do not differentiate between the two assets contributed. Choice B is incorrect because it attempts to combine both assets as a single debit. Choice D is incorrect because it tries to credit both cash and land, which were not both debited.

Robert Haddon Contributed $70,000 in Cash and Land Worth $130,000