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Capital Investment amount transfer from one business account to the other. what would be the treatment ?

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Capital Investment amount transfer from one business account to the other. what would be the treatment ?

Hey guyz , i need to ask a quick question to Corporate reporting geniuses , if a Sole proprietor introduces a capital to his business but instead of bringing in cash , he simply transfers cash from sub business bank account to the primary business bank account. would the correct treatment be ..
e.g " He transfers 200,000 from sub to primary account "

P Bank a/c 400,000 debit
Sub Bank A/c 200,000 credit
Capital A/c 200,000 credit

correct me , if i am wrong . Thank you very much.

May 3rd 2017 AN ACCA USER 200 Points

2 Replies

0 Votes

For subsi co
Dr Primary Co 200k
Cr bank a/c 200k

For primary co
Dr bank 200k
Cr share capital 200k

Because the question not so complete so I not sure whether there is any related party transaction or whether that will consider as subsi hold shares in the primary at the end.

Compare to debit 400 in the primary co, I think this answer is more relevant. Hope this will help you.

May 4th 2017 AN ACCA USER 150 Points
0 Votes

Thanks @Jee Ying Yan but you misunderstood.
What i tired asking was.
P for Primary Bank account and S for Secondary Bank Account.
Business owner has one main account in a bank ABC for example. And in the same bank he has a secondary account which he has opened for emergency purposes. He simply transferred amount for investment purpose from secondary account to the principal Trading Account.
What would be the correct treatment?

May 4th 2017 AN ACCA USER 200 Points
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