Mahesh wants to start his business and for that he decided that he will take loan for rupees 7 lacs from the Bank of Baroda he also decide to use his savings word 3 lakh in the bank account to start the business discuss how these two transaction will be recorded in the books of accounts by passing the relevant journal entries
Answers
Relevant journal entries:
Given:
Mahesh wants start business from
bank of baroda loan of 7 lacs rupees and saving bank account worth of 3 lacs rupees.
To find:
•Journal entries for business bank of baroda loan:
Date Accounts. Debit. Credit
Cash A/c 7 Lacs
-
Bank of baroda
loan A/c 7Lacs
( being business commenced with loan)
•Journal entries for savings bank A/c brought in to business:
Date Accounts. Debit. Credit
- Cash A/c. 3 Lacs
Owners capital 3Lacs
(being business commenced also with owner funds)
solution:
1. Date Accounts. Debit. Credit
Cash A/c 7 Lacs
-
Bank of baroda
loan A/c 7Lacs
2.Date Accounts. Debit. Credit
- Cash A/c. 3 Lacs
Owners capital 3Lacs