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    hippie84's Avatar
    hippie84 Posts: 6, Reputation: 1
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    #1

    May 2, 2006, 09:08 PM
    Journal entry
    If my company receives an inheritance and contributes 10,000 in cash to the business, how should I jounalize this?
    CaptainForest's Avatar
    CaptainForest Posts: 3,645, Reputation: 393
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    #2

    May 2, 2006, 09:10 PM
    What?

    If the company is receiving the inheritance, then they are the ones receiving the cash.

    Please clarify.
    hippie84's Avatar
    hippie84 Posts: 6, Reputation: 1
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    #3

    May 2, 2006, 09:12 PM
    Then I will debit cash but what should I credit?
    CaptainForest's Avatar
    CaptainForest Posts: 3,645, Reputation: 393
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    #4

    May 2, 2006, 09:13 PM
    So you are saying that the inheritance the company is receiving is cash in the amount of $10,000?

    Dr. Cash 10,000
    Cr. Donated Capital 10,000
    hippie84's Avatar
    hippie84 Posts: 6, Reputation: 1
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    #5

    May 2, 2006, 09:16 PM
    Thanks a lot. Yes, the inheritance is in cash. I do have 1 more question. When you credit Capital, it means your capital increases? But I thought capital was one kind of asset, should it be debited when increase?
    CaptainForest's Avatar
    CaptainForest Posts: 3,645, Reputation: 393
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    #6

    May 2, 2006, 09:20 PM
    Quote Originally Posted by hippie84
    I do have 1 more question. when you credit Capital, it means your capital increases?
    Correct.


    Quote Originally Posted by hippie84
    But i thought capital was one kind of asset, should it be debited when increase?
    When Capital or Liabilities increase, you CREDIT it. When it decreases, you DEBIT it.

    Assets are the reverse. When an asset increases, you DEBIT it, when it decreases, you CREDIT it.

    That is why ASSETS = LIABILTIES + CAPITAL
    hippie84's Avatar
    hippie84 Posts: 6, Reputation: 1
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    #7

    May 2, 2006, 09:25 PM
    Thanks again, I appreciate it
    CaptainForest's Avatar
    CaptainForest Posts: 3,645, Reputation: 393
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    #8

    May 2, 2006, 09:26 PM
    You're welcome
    manpreet.kaur's Avatar
    manpreet.kaur Posts: 3, Reputation: 1
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    #9

    Nov 20, 2011, 05:39 PM
    1. A receipt for a $45 calculator purchased for the general office was found at the end of the year. This acquisition was for cash.
    Office expense………….. $45
    Cash………………………………………⠀¦â€¦â€¦â€¦$45
    manpreet.kaur's Avatar
    manpreet.kaur Posts: 3, Reputation: 1
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    #10

    Nov 20, 2011, 05:40 PM
    1. A receipt for a $45 calculator purchased for the general office was found at the end of the year. This acquisition was for cash.
    Office expense………….. $45
    Cash………………………………………⠀¦â€¦â€¦â€¦$45
    pready's Avatar
    pready Posts: 3,197, Reputation: 207
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    #11

    Nov 20, 2011, 06:49 PM
    Debit Office Expense for 45 (or appropriate Expense Account)
    Credit Cash for 45
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