Capital Entry
Cash Receipts Journal

by Vikash Naidu
(Auckland, New Zealand)

Q: Which accounts are affected and what is the entry for the following:

June 1: The owner invested an additional capital of $20,000 in the business bank account.

A: Whenever the owner invests funds this is capital and the account has the same name. If he is investing money this would be the cash/bank account.

So the entry would be as follows:

Debit: Bank...............$20,000
Credit: Capital....................$20,000

The type of journal in which this would be recorded would be the cash receipts journal, as it is a receipt of cash.