Question

Shyam become insolvent a first and final compensation of 25 paise in a Rupee was received from his official receiver he or a depth of 50000.

Give journal.

Answer 1

Heyaa,,,
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¤ journal entry for Shyam became insolvent a first and final compensation of 75 paise in a Rupee was received from his official receiver he or a depth of 50000 will be;
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Cash a/c dr 37,500
bad debts a/c 12,500
to Shyam a/c 50,000
(being shyam became insolvent and 75paise in a ruppee can be recovered from his estate.)
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¤ Reason for debit and credit;
° cash is coming in to the business so, it will be debited.
° baddebts is a loss to the business so, it will also be debited.
° shyam is the giver of cash so, it will be credited.
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