Jack Pickle decided to start a small business as a corporation. His initial investment was $4,000 cash in exchange for common stock. Demonstrate how to record this transaction in the accounting equation?

Increase cash by $4,000 and Increase common stock by $4,000

Explanation:

Demonstration of how to record Jack Pickle

transaction in the accounting equation

Since we were told that Jack Pickle decided to start a small business in form of a corporation in which his initial investment was the sum of $4,000 cash and the cash was in exchange for common stock, therefore using accounting equation this means when we want to record Jack Pickle transactions we have to increase the cash by the sum of $4,000 and the increase common stock by the sum of $4,000.

Increase cash by $4,000 and Increase common stock by $4,000

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