David and Daniel formed a partnership.David invested $12,000,cash;Daniel invested $7,000 cash and equipment with a fair value of $5,000.The proper entry to record this is to:
A)debit Cash $19,000;debit Equipment $5,000;credit Capital $24,000.
B)debit Cash $19,000;debit Equipment $5,000;credit Accounts Payable $24,000.
C)debit Cash $19,000;debit Equipment $5,000;credit David's Capital $12,000;and credit Daniel's Capital $12,000.
D)debit Cash $19,000;credit David's Capital $12,000;and credit Daniel's Capital $7,000.

Question

Quizplus · Accepted Answer

The entry should reflect the investment made by each individual partner, so Cash and Equipment should be debited for the total amount invested by both partners, and their individual capital accounts should be credited for the amounts invested by each partner separately. Therefore, the correct entry is to debit Cash $19,000 and Equipment $5,000, and credit David's Capital $12,000 and Daniel's Capital $12,000.

David and Daniel Formed a Partnership