Blake and Ryan each invest $30,000 in a business and are given shares of stock in Jones Industries as evidence of their ownership interests. For this transaction, identify the effect on the accounting equation.

Question

Business

Leilani Mcbride

1 October, 14:53

Blake and Ryan each invest $30,000 in a business and are given shares of stock in Jones Industries as evidence of their ownership interests. For this transaction, identify the effect on the accounting equation.

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Chasity Perez · Answer 1

Both asset and equity increases

Explanation:

As we are accepting investments from Blake and Ryan in the form of cash and offering our shares in exchange. This will result in our cash (asset) will increase by the value of $60,000 and Equity is also raising by issuing shares of $60,000 value to both Blake and Ryan equally.