Question

what is journal entry of purchased a building from ram for 1200000 by taking a loan from bank of 1000000

Answer 1

Building A/c - Dr. 2,00,000

        To Bank Loan A/c 2,00,000

(Being building purchased on loan recorded)

Here, Bank Loan a/c has been credited as it is a liability of the business concern.

Answer 2

Answer:

building a/c. dr. ( purchase is expense)

12,00,000

to bank loan a/c. (liability) 10,00,000

to ram a/c. (creditor) 2,00,000