Question

Paid insurance premium rs.1000 on the life policy of proprietor what will be the journal entry for it?

Answer 1

Business started with cash 8,000 and plant & machinery 3,000.
2 - Stock purchase for sale (cash purchase)= 3,000, credit purchase = 5,000
3 - Wages paid 120,000(including 20,000 of future year).
4 - Salary paid 200,000 but due 110,000.
5 - Sale made for cash 600,000 & on credit 800,000.
6 - Depreciation 10 percent on plant & machinery.
7 - Goods costing 20,000 destroyed by fire.
8 - Payment made to creditor of 200,000 at 10 percent discount

Answer 2

Drawing A/c ......Dr 1000
To Cash A/c 1000
(Being paid for life insurance
premium)

Since it is the life insurance premium of proprieter, it will treated as drawing as the cash of business is paid for personal use of proprieter.

Hope it helps you