Purchased land and a small office building. The land was worth Rs.1,50,000 and the building worth Rs. 3,50,000. The purchase price was paid with Rs. 2,00,000 cash and a long term note payable for Rs. 3,00,000.
Answers
Answered by
4
Answer:
date. particular. l/f. Dr. cr. 1. land a/c. Dr. 150000. ----- building a/c. Dr. 350000. ------ to cash a/c. ------ 200000 to creditor a/c. ------- 300000 More
Answered by
0
In this question, we are asked to pass the necessary journal entry.
Land A/C DR 1,50,000
Building A/C DR 3,50,000
Cash DR 2,00,000
Long-term Payable A/C 3,00,000
(Being land and building purchase, cash given, and long-term note withdrawn)
- Land Building is an asset and when it is purchased it is debited, asset increases then it is debited and when it decreases it is credited.
- Cash is also an asset, and it is decreasing as we are giving payments so it will be credited.
- Long-term note is drawn against the balance amount, and it is a liability as we need to pay, and when it increases it is credited, and when decreases it is debited.
PROJECT CODE #SPJ2
Similar questions