Practice prompt · Q:transactions-to-statements/shareholder-cash-equipment-entry-002

Shareholders contribute cash and equipment

Prepare a 3 line entry for 2 assets received in exchange for common stock.

Updated Aug 30, 2026 Review due Nov 30, 2026

Practice

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The shareholders of Vale Analytics contribute $14,000 cash and equipment in exchange for no-par common stock. An independent appraisal supports a $22,000 amount for the equipment. Which entry records the contribution?

Choose the best answer. A Cash $14,000 Equipment $22,000 Common Stock $36,000 B Cash $14,000 Equipment $22,000 Service Revenue $36,000 C Cash $36,000 Common Stock $36,000 D Equipment $22,000 Cash $14,000 Common Stock $8,000

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Answer: A

Cash $14,000 Equipment $22,000 Common Stock $36,000

Cash increases by $14,000 and Equipment increases by $22,000, so both assets are debited. Common Stock is credited for their $36,000 total.