Question

Issued a cheque of Rs 135000 toshipag centre for the full settlement of Rs 140000

Answer 1

total Amount paid= 135000

actually payable= 140000

so Discount recieved= 140000 - 135000 = 5000..its a gain to us....

The transaction affects three accounts... toshipag account (we owe money) , bank a/c(paid by Cheque 135000 ) , Discount recieved a/c( recieved 5000 Discount )..

Mahesh account is a Personal account (as the name suggests)

bank account is a Real account (All the assets and Liabilities come under Real account; cash is an asset)

Discount Recieved is a nominal account (All expenses incomes gains losses come under nominal account and Discount recieved is a gain)


The Three golden rules of accounting are..

Personal account - Debit the receiver credit the giver..

Nominal account - Debit All expenses and losses, credit All incomes and gains

Real account - Debit what comes in ,credit what goes out.

in contention with the above rules..

toshipag should be debited (he is the receiver)

Discount Recieved hould be debited (its a gain)

bank should be credited (cash is going out).


So the journal Entry will be...

toshipag a/c Dr 10000

To Discount recieved a/c 5000

To Bank a/c. 135000

(Being amount due to toshipag settled )

Answer 2

Toshipag Centre  A/C  Dr  Rs.1,35,000

     To Discount Received A/C Rs. 5,000

     To Bank A/C  Rs.1.35.000

(being Toshipag Centre's A/C settled)