Capital brought in - Additional Capital raised

Capital can be contributed either by bringing in an asset or taking over a liability.

Capital being a non-current liability, the asset brought in or the liability taken over towards contribution of capital should be of a current nature so as to form a cross transaction bringing about a change in working capital.

Recording Dr. Cash/Bank/Current (Asset/Liability) a/c
Cr. Capital a/c
Current
Non-Current

If the asset brought in is a non current Asset, or if the liability taken over is a non-current Liability, the transaction would not amount to a cross transaction and as such there would be no change in working capital on account of this transaction.

Recording Dr. Machinery/Debentures (Asset/Liability) a/c
Cr. Capital a/c
Non-Current
Non-Current
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