How to record journal entries for owner contributions of tangible goods?
What would the journal entries look like for the following transaction:
The sole equity holder of XYZ-Co. contributes office supplies worth $100 to XYZ-Co. as a capital contribution.
Would you just debit office supplies and credit owner's equity by $100 each?
(I know this is probably a stupid question, but I've forgotten most of the accounting I learned in college in the few years since I graduated.)
That's pretty much it, yes, except that (I think) you would really want to have an account called 'Capital - (owner's name)'. You would also want to have an account called
'Withdrawals - (owner name)'. That way you are keeping track of both owner contributions and owner withdrawals, instead of just lumping them together in a single catch-all owner equity account. (Provides slightly more detail and slightly more usefulness to the financial statements with very little effort.)
So for this transaction, it would be:
Debit 'Office Supplies' $100
Credit 'Capital - (owner name)' $100