Question

Sri bhattacharya commenced business with cash 60,000 and 1,50,000 by taking a loan from the allahabad bank. Write the journal.

Answer 1

Answer:

Cash A/c    Dr   210000

     To Capital A/c       60000

      To Bank Loan A/c   150000

Explanation:

Capital is introduced in business through cash and bank loan. The dual entry system enables us to record all assets and liabilities in such a manner that the sum of liabilities and capital is equal to assets.

Thus Cash is coming into business and is Dr and the bank loan being a liability is Cr and capital is also Cr with the cash introduced.