Pass the journal entry : Cash received Rs. 20,000 from Mr Ramdas as a loan of unsecured.
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Answer: Dr Cr
Cash A/c ...........dr 20000 -
To, Mr. Ramdas's A/c -20000
(Cash recieved from Mr. Ramdas as a loan unsecured.)
Explanation:
Though the entry is about taking an unsecured loan, but we should see that who is receiving money and who is giving it respectively.
Cash is an asset and Mr. RAMDAS Is our (business)liability.
See, increase in asset is debited and thus Cash A/c(asset) is debited. And if cash is debited the other account I.e Ramdas's account must be credited!
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