Answered: Which of the following is true of the…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Question

Marcee and Rebecca are partners. Marcee has a capital balance of $50,000 and Rebecca has a capital balance of $35,000. Rebecca sells $15,000 of her ownership to Jason. Which of the following is true of the journal entry to admit Jason?

A	Rebecca, Capital will be credited for $15,000
B	Jason, Capital will be debited for $20,000
C	Jason, Capital will be credited for $15,000
D	Rebecca, Capital will be debited for $20,000

Expert Solution

Step 1

Journal entry:

Journal entry is the book of original entry where first transactions are recorded in the books of account. In the accounting cycle, the first step an accountant or a bookkeeper follows is the journal entry. It consists of a debit side and credit side balances. Both debit side balance and credit side balance should be matched.

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