Question

jounalise...purchased old furniture for 18000 from vivek. paid its repairs 2500 and cartage 600... *ans asap*

Answer 1

Furniture A/C. Dr. Rs.21,100

To Vivek A/C. Rs.21,100

(Being old furniture bought from Vivek and repairs of Rs.2500 and cartage of Rs 600 spent on it)

Here, furniture is an asset. So when asset comes in , asset balance increases . so we asset balance increases we need to debit it.

And any expenses incurred to bring the asset to the stage of its intended use should also be capitalized along with the cost of the asset. So we have to add the repairs and cartage expenses to the furniture cost.

And we bought furniture on credit from vivek. So vivek is our creditor. So we are crediting vivek a/c.