Question

Hari started business with bank balance Rs. 20,000. Required journal entry​

Answer 1

Answer:

Bank a/c. Dr. 20000

To cash a/c 20000

Answer 2

Bank A/c                                       ----Dr.               20,000

              To Capital A/c                                                        20,000

(Being business commenced with a bank balance of Rs.20,000.)

GIVEN: Hari started the business with a bank balance of Rs. 20,000.
TO FIND Journal Entry for commencement of the business.
SOLUTION:
As we are given in the question,

Hari is an entrepreneur who wants to start up his business with a bank balance of 20,000.

As we know,

Hari starts the business with a bank balance of 20,000.

Therefore,

We must add 20,000 to the bank account and it adds to the flowing asset of the business. It shall be debited.

Also, As the flowing assets in the business increase, we may credit the capital. As we know, to increase the capital it should be credited as it is of a liability nature.

Therefore,

The journal entry for the same shall be passed as:

Bank A/c                                       ----Dr.               20,000

              To Capital A/c                                                        20,000

(Being business commenced with a bank balance of Rs.20,000.)

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