Question

Paid rent of ₹ 89,999 out of this 35% of owners house. journal entry​

Answer 1

Answer:

The transaction affects three accounts..

Rent account (rent paid) , Drawings account (rent paid for Personal use out of the business) , Bank account (rent paid by Cheque)

Rent account , Drawings account are nominal accounts (All incomes gains losses expenses come under nominal account; rent paid is an expense,Drawings is an expense)

Bank account is a real account( all assets and Liabilities come under Real account; Bank Balance is an asset)

The Three golden rules of accounting are...

Personal account - Debit the receiver ,credit the giver

Nominal account - Debit All expenses and losses, credit All incomes and gains

Real account - Debit what comes in, credit what goes out

in contention with the above rules..

Rent account should be debited (its an expense)

Bank account should be credited (cash in bank is going out)

Drawings account should be debited (its an expense)

So the Journal Entry will be..

Office rent account Dr ××××

Drawings a/c ××××

To Bank a/c ××××

(Being rent paid).

Explanation:

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