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    jorchid's Avatar
    jorchid Posts: 1, Reputation: 1
    New Member
    		  
    #1

    Jul 21, 2009, 10:46 AM
    Cash Investment
    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?
    hamzashakaa's Avatar
    hamzashakaa Posts: 161, Reputation: 8
    Junior Member
    		  
    #2

    Jul 21, 2009, 11:40 PM

    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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