[Q1] Owner invested $700,000 in the business.
Prepare a journal entry to record this transaction.
[Journal Entry]
| Debit | Credit | |
| Cash | 700,000 | |
| Owner’s Equity | 700,000 |
[Notes]
Debit: Increase in cash
Credit: Increase in equity
This journal entry is prepared to record this transaction in the accounting records of the business.
[Q2] Owner withdrew $100,000 from the business.
Prepare a journal entry to record this transaction.
[Journal Entry]
| Debit | Credit | |
| Owner’s Equity | 100,000 | |
| Cash | 100,000 |
[Notes]
Debit: Decrease in equity
Credit: Decrease in cash
This journal entry is prepared to record this transaction in the accounting records of the business.
[Q3] What is the balance of owner’s equity after the withdrawal?
Owner’s equity balance = $700,000 – $100,000 = $600,000