Question

purchased 100 war bond for rs100 each at 95 and paid for them by cheque​

Answer 1

Answer:

war bond ac. rs 9500

to bank ac. rs 9500

Explanation:

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Answer 2

War Bond A/c                      ---Dr              9500

        To Bank A/c                                              9500

(Being War Bonds bought by making payment through cheque.)

GIVEN: Purchased 100 war bonds for rs100 each at 95 and paid for them by cheque​
TO FIND Journal Entry for purchasing War bonds and making payment using a cheque.
SOLUTION:
As we are given in the question,

Purchased 100 war bonds for rs100 each at 95 and paid for them by cheque.

According to the question,

A war bond which is priced at Rs.100 is bought for Rs.95.

And the payment is made by cheque, Implying that the bank balance of the firm is used.

In this transaction,

We shall debit War Bonds as they are a kind of asset to the business.

Similarly,

The bank account shall be credited as the value of the asset decreases.

Therefore,

The Journal entry for the same will be:

War Bond A/c                      ---Dr              9500

        To Bank A/c                                              9500

(Being War Bonds bought by making payment through cheque.)

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