If my company receives an inheritance and contributes 10,000 in cash to the business, how should I jounalize this?

What?

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

Please clarify.

Then I will debit cash but what should I credit?

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

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?

Quote:

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Originally Posted by hippie84

I do have 1 more question. when you credit Capital, it means your capital increases?

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Correct.

Quote:

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Originally Posted by hippie84

But i thought capital was one kind of asset, should it be debited when increase?

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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

Thanks again, I appreciate it

You're welcome

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

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

Debit Office Expense for 45 (or appropriate Expense Account)
Credit Cash for 45