Question

Record necessary journal entries in the following cases: [a] Creditors worth Rs 85,000 accepted Rs 40,000 as cash and Investment worth Rs 43,000, in full settlement of their claim. [b] Creditors were Rs 16,000. They accepted Machinery valued at Rs 18,000 in settlement of their claim. [c] Creditors were Rs 90,000. They accepted Buildings valued Rs 1,20,000 and paid cash to the firm Rs 30,000.

Answer 1

Explanation:

Creditors A/c Dr 85000

To Cash 40000

To Investment. 43000

To Discount Received 2000

Creditor.A/C Dr 16000

loss on machinery Dr 2000

To Machinery. 18000

Creditors. Dr. 90000

Cash. Dr. 30000

To Building. 120000