Question

bought goods from pawan, list price rupees 15,000 less 20% trade discount

Answer 1

Trade discount is not recorded in the books of accounts..it is deducted from the) List price of that product at the time of Purchase itself.. That net amount is considered to be the historical price of that product and is recorded in the books of accounts.

Given List price = 15000

Trade discount=20%@15000=3000

Purchase price= 15000-3000 = 12000

Also given that Goods are Purchased from pawan . ....

So the current transaction affects two accounts..

Purchases (nominal) account and pawan. (Personal) account...

The Three golden rules of accounting are

Personal account - Debit the receiver credit the giver

Real account - Debit what comes in credit what goes out

Nominal account - Debit All expenses and losses credit all incomes and Gains

as Per above rules
since Purchases is an expense so should be debited,pawan is the giver so should be credited..

So the Journal Entry will be.

Purchases a/c Dr 15000

To pawan a/c. 15000

(Being Goods Purchased from pawan)

Answer 2

Purchases a/c. Dr. 15000
To discount received a/c. 3000
To pawan a/c. 12000

Hope it will help you. ☺