Question

5. Record the following transactions in the books of C.K. Prahalad :
2015
Prahlad commenced business with cash 2,40,000.
Cash withdrawn from business for personal use F 18,500.
Apr.10 Additional capital introduced in the business F 24,800.
Apr.15 Life insurance premium paid F 11,000.
Apr.20 Personal car introduced in the business + 4,50,000.
Apr. 1
Apr. 4​

Answer 1

Answer:

The journal is:

Cash account….Dr…..240,000

Capital account….Cr….240,000

Explanation: He brought cash to start a business and as a result cash increased. Increase of cash is debit account. On the other hand this cash will be treated as the starting capital of the business as he brought the cash to commece his business. So capital increased and increase of capital is credit.