Eli Opened a New Business by Investing the Following Assets

question 29

Multiple Choice

Eli opened a new business by investing the following assets: cash,$6,000; land,$30,000; building,$100,000.Also,the business will assume responsibility for a note payable of $22,000.Eli signed the note as part of his payment for the land and building.Which journal entry should be used on the books of the new business to record the investment by Eli?

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Definitions:

Future Value

The value of a current asset at a specified date in the future based on an assumed rate of growth over time.

Interest Rate

The percentage of a loan that incurs interest for the borrower, usually shown as an annual rate based on the remaining loan balance.

Current Dollars

A term referring to the nominal value of money at the present time, without adjusting for inflation or deflation.

Payment Stream

A sequence of monetary payments that may be periodic or scheduled in some fashion, often related to finance or investing.