(1) Mohan commences business with 50,00,000 in his bank account. This means that the firm has
50,00,000 in bank. According to the rules given above, the increase in an asset has to be debited to it.
The firm also now owes 50,00,000 to the proprietor, Mohan as capital. The rule given above also shows
that the increase in capital should be credited to it. Therefore, the journal entry will be:
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Bank account. dr. 5000000
To Mohan capital account. 5000000
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