Bloom and Plant organize a partnership on January 1.Bloom's initial investment consists of $800 cash,$1,700 equipment and a $500 note payable reflecting a bank loan for the new business.Plant's initial investment is cash of $2,000.These amounts are the values agreed on by both partners.The journal entry to record Plant's investment is:
A)Debit Cash $1,500;debit Note Payable $500;credit Plant,Capital $2,000.
B)Debit Cash $2,000;credit Note Payable $500,credit Plant,Capital $1,500.
C)Debit Bloom,Capital $2,000;credit Cash $2,000.
D)Debit Cash $2,500;credit Note Payable $500;credit Plant,Capital $2,500.
E)Debit Cash $2,000;credit Plant,Capital $2,000.

Question

Quizplus · Accepted Answer

Plant's initial investment is solely in cash, therefore, the journal entry would be to debit Cash for $2,000 and credit Plant, Capital for $2,000. The other answer choices include incorrect amounts or accounts.

Bloom and Plant Organize a Partnership on January 1