From the course: Accounting Foundations: Bookkeeping

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Obtaining financing and buying equipment

Obtaining financing and buying equipment

From the course: Accounting Foundations: Bookkeeping

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Obtaining financing and buying equipment

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- [Instructor] You're 18 again, and you want to work outdoors and set your own schedule. So, let's start our own landscaping business. Okay, your first task in starting this business is to acquire cash, either through owner's investment or by borrowing. Now, remember, you're 18 again. You got a full head of hair and a million ideas. You're ready to make some money. You have $1,000 in savings, and your parents have offered to match your funds. You decide to issue 200 shares of stock. You make this journal entry. This transaction increases Cash as a result of capital stock being issued to investors or stockholders. The Cash account is debited because an asset, cash, increased. And the Capital Stock account is credited. Remember, Owner's Equity accounts are increased with credits. The economic impact of this situation may be summarized as follows in the accounting equation. Note from the journal entry that our debits equaled our credits. And note from the spreadsheet that our assets…

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