A company invests cash with an entity that promised 100% interest on their investment. Should the cash invested be posted to an equity account or an asset account?
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A company invests cash with an entity that promised 100% interest on their investment. Should the cash invested be posted to an equity account or an asset account?
The investee company should record the following entry:
Dr. CASH
Cr. Equity (common stock)
The investor should record:
Dr. Investment
Cr. Cash
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