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Indicate how the following business transactions affect the basic accounting equation?and how to record?

Investor Borrowed, million $ and put it as capital of  new company .

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Question ajoutée par abdelaziz allam , محاسب اول , شركة كامبردج مصر للاستثمار التعليمي ش.م.م
Date de publication: 2016/02/17
تحسين صوان
par تحسين صوان , محاسب رئيسي , ش العربيه لصناعه المواسير (شركه مساهمه عامه )

Sorry I did not understand the question

Frank Mwansa
par Frank Mwansa , ACCOUNTING LECTURER , FREELANCER

In accounting, capital is an investment of money with the intention of earning a return. The investor invests capital with the intention of earning profit. As long as that money is invested, accountants will treat the capital as money owed to the proprietor by the business.

The basic accounting equation will be affected as follows.

            *  The asset s ( cash) will increase by the amount invested

            * The liability  ( capital) will increase by the same amount.Debit  cash  

Credit  capital

 

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