Question

230000 plant and machinery purchased by paying 30000 cash immediately

Answer 1

Plant and machinery A/c   dr   230000
      To cash A/c                                         30000
       To vendor a/c                                   200000
(being 30000 paid for purchase of plant and machinery)

as per accounting equation 

 It affects Cash and Plant and Machinery on the assets side and liabilities on the other side of the equation. There is an increase in plant and machinery by Rs. 230000  and decrease in cash by Rs. 30000 . Liability to pay to the supplier of plant and machinery increases by Rs. 200000

Hope its useful ..!!!!!

Answer 2

Liability to pay to the supplier of plant and machinery increases by Rs. 200000.

What is the journal entry for plant and machinery?

• When you purchase plant and machinery and payment made by cheque the entry will be as follows. CR Bank a/c. Debit PP&E (your fixed asset).

What is included in plant and machinery?

• Plant and Machinery means all plant and machinery, equipment, fittings, installations and apparatus, tools, motor vehicles and all other similar assets (other than any assets that are deemed by law to be immoveable property), wherever they are situated, which are now, or at any time after the date of this Deed become, ...

What is the entry of purchase?

• A purchase credit journal entry is recorded by a business in their purchases journal on the date a business purchases goods or services on credit from a third party.
• The business will debit the purchases account and credit the accounts payable account in the business's Purchases journal.

According to the question:

Plant and machinery A/c   dr   230000

     To cash A/c                                         30000

      To vendor a/c                                   200000

(being 30000 paid for purchase of plant and machinery)

as per accounting equation

It affects Cash and Plant and Machinery on the assets side and liabilities on the other side of the equation. There is an increase in plant and machinery by Rs. 230000  and decrease in cash by Rs. 30000 . Liability to pay to the supplier of plant and machinery increases by Rs. 200000

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