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hippie84
May 2, 2006, 09:08 PM
If my company receives an inheritance and contributes 10,000 in cash to the business, how should I jounalize this?

CaptainForest
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
May 2, 2006, 09:12 PM
Then I will debit cash but what should I credit?

CaptainForest
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
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
May 2, 2006, 09:20 PM
I do have 1 more question. when you credit Capital, it means your capital increases?

Correct.



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
May 2, 2006, 09:25 PM
Thanks again, I appreciate it

CaptainForest
May 2, 2006, 09:26 PM
You're welcome

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