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The amount invested in a business by the owner are amounts that the business owes to the owner. This is a special kind of liability called capital. In a limited liability company, capital usually takes form of shares. Share capital is also known as equity. As such contributed capital from a company point of view is a liability and is a credit entry.
The account Contributed Capital is part of stockholders' equity and it will have a credit balance. Contributed capital is also referred to as paid-in capital.
When a corporation issues shares of its stock for cash, the corporation's current asset Cash will increase with the debit part of the entry, and the account Contributed Capital will increase with the credit part of the entry. If the corporation then uses some of its cash to purchase equipment, its current asset Cash will decrease and its noncurrent asset Equipment will increase.
the contributed capital.is part of the stock holder equities ,the nature is credit
