Question

issued cheque in favour of Krishna & Co. to settle their account of 270 260

Answer 1

Krishna & Co.  A/C  Dr   Rs. 270

    To Discount received Rs.10

    To Bank A/C  Rs.260

(being Krishna & co. A/C settled through cheque)

Answer 2

3 golden rules

• debit the receiver , credit the giver

• debit what comes in , credit what goes out

• debit all the expenses and losses , credit all the incomes and gains

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reason for debit and credit

Krishna & co  A/c - personal A/c , krishna & co  is the creditor and receiver of the money therefore its debited

Discount received A/c - Nominal A/c , its the gain to us because we have  paid less than being payable   therefore its credited

Bank A/c -personal A/c , where banker pays the money they are giver therefore its credited

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Journal entry

Krishna & co  A/c     Dr         270

       To discount Received A/c      10

        To Cash A/c                            260

(being full settlement made to Krishna & co )