Which of the Following Entries Below would be Included in the Accounting Transaction to Record the Following Business Transaction? Our Business Received \( \$ 100,000 \) Cash and \( \$ 75,000 \) worth of Equipment from Investors in Exchange for Common Stock Ownership in the Business. Credit to Common Stock for \( \$ 175,000 \) Credit to Equipment for \( \$ 75,000 \) Debit to Dividends for \( \$ 100,000 \) Debit to Cash for \( \$ 25,000 \) Debit to Equipment for \( \$ 75,000 \) Debit to Cash for \( \$ 100,000 \) Debit to Retained Earnings \( \$ 175,000 \)

To record the business transaction where the business received \( \$ 100,000 \) cash and \( \$ 75,000 \) worth of equipment from investors in exchange for common stock ownership, we need to analyze the components of the transaction. ### Known Conditions: 1. Cash received: \( \$ 100,000 \) 2. Equipment received: \( \$ 75,000 \) 3. Total value received: \( \$ 100,000 + \$ 75,000 = \$ 175,000 \) 4. This total value is exchanged for common stock ownership. ### Accounting Entries: In accounting, the double-entry system requires that for every debit, there is a corresponding credit. 1. **Debit Cash**: Since the business received cash, we will debit the Cash account for \( \$ 100,000 \). 2. **Debit Equipment**: The business also received equipment, so we will debit the Equipment account for \( \$ 75,000 \). 3. **Credit Common Stock**: The total value received in exchange for common stock is \( \$ 175,000 \), so we will credit the Common Stock account for \( \$ 175,000 \). ### Summary of Entries: - **Debit Cash**: \( \$ 100,000 \) - **Debit Equipment**: \( \$ 75,000 \) - **Credit Common Stock**: \( \$ 175,000 \) ### Evaluation of Options: Now, let's evaluate the provided options based on the above analysis: 1. **Credit to Common Stock for \( \$ 175,000 \)** - **Correct** 2. **Credit to Equipment for \( \$ 75,000 \)** - **Incorrect** (should be a debit) 3. **Debit to Dividends for \( \$ 100,000 \)** - **Incorrect** (not related to this transaction) 4. **Debit to Cash for \( \$ 25,000 \)** - **Incorrect** (should be a debit of \( \$ 100,000 \)) 5. **Debit to Equipment for \( \$ 75,000 \)** - **Correct** 6. **Debit to Cash for \( \$ 100,000 \)** - **Correct** 7. **Debit to Retained Earnings \( \$ 175,000 \)** - **Incorrect** (not related to this transaction) ### Conclusion: The correct entries to include in the accounting transaction are: - **Credit to Common Stock for \( \$ 175,000 \)** - **Debit to Equipment for \( \$ 75,000 \)** - **Debit to Cash for \( \$ 100,000 \)** Thus, the correct entries are the first, fifth, and sixth options.