Question

Journal entry-

A new car was purchase for 6 lakh for office use. it was paid by taking loan from Bank of 5 lakh and balance by issue of cheque from firms bank account

Please help
What will be the entry ?

Answer 1

The journal entry for the given transaction will be as follows :

Machinery A/C Dr 6,00,000

To cheque in hand A/C. 6,00,000

(Being car purchased)

Cheque in hand A/C Dr 5,00,000

To machinery A/C 5,00,000

(Being payment made through the cheque)

Bank loan A/C Dr 1,00,000

To machinery A/C 1,00,000

(Being payment made through a loan)