Answer to Question #256497 in Accounting for Nel

Question

Prepare journal entries for the following transactions: 1. Sheena invested 100,000.00 cash to start her salon. 2. Christian borrowed 200,000.00 cash from Mark to be invested in his barbershop. 3. Luka inherited a parcel of land with fair market value of 1,000,000 from his father, he constructed a building in the said land with a construction cost of 500,000 to be used for his garments business. 4. Stephen resigned from his work as a mechanic and decided to open his own car repair shop. He brought in his rented shop his own tools with a fair value of 10,000 and 20,000 as initial operating cash.

Answer 1

1) Dr Bank/Cash 100,000

Cr Capital 100,000

2) Dr Cash 200,000

Cr Creditor Mark 200,000

3) Dr Land 1,000,000

Cr Inheritance 1,000,000

Dr Building for business 50,000

Cr Cash/Bank 50,000

4) Dr Tools 10,000

Dr Cash 20,000

Cr Capital 30,000