Question

Journal Entry for Received Rs.7000 from Kamal as loan at 5% Interest

Answer 1

Answer:

Cash a/c Dr 7000

To loan a/c 7000

Explanation:

In above transaction we have receive loan from Kamal assume that we have taken cash as a loan which mean that oure assets is increase( receiving cash mean increasing cash) but we have to pay back that loan which mean that our liablites increase and increasing in liablites is always record in Credit side and increase in Assets is always record in Debit side.

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Part of interest is ignore because that is not paid or time period for paying interest is not in present.

Answer 2

In this question, we are asked to pass journal entries for the loan received.

Journal Entry will be -

Cash A/C DR 7,000

                        To Loan A/C 7,000

(Being cash received for the loan given)

• Journal is also known as the book of original entry or the book of prime entry.
• This makes it the most significant book of accounts because it is where transactions are first entered. Systematically and chronologically, the transactions are recorded.
• The rule of journal entry requires the total of debits and credits to equal zero, although the number of debits and credits need not be equal.
• They are entered to indicate which accounts should be debited or credited.
• One debit might be followed by two or more credits, one credit could have two or more debits, or even two or more credits could have been debited.
• Debit what is received, credit what is expended.
• Second, credit all incomes and profits and debit all expenses and losses.
• Third, Debit the receiver, Credit the giver.

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