My question was how do you account for granting a vested capital interest of 3,000 in you books, as well as balance sheet and income statement. You replied "You have to debit cash and credit the capital account."
If you debit cash, I assume this is your checking account, then you are increasing the account, as well as increasing the capital account. Don't you have to set up another special asset account that you increase, which would turn out to be equivalent to a "good will" account, that you could depreciate until it is used up. If you simply debit your main cash account, I don't see how that shows up on your Profit and loss statement, and how would you reconcile your checking account, since there are no actual funds changing hands.
