Question

what will be journal entry for 1.purchased office equipments.1 0000 2.invested in shares of M/s. Kamana Trading co ltd 20000. 3. sold old Personal car & amount invested in business 50000

Answer 1

The Journal Entries in the books of "Business" are...

Office Equipment a/c Dr 10000

To cash a/c 10000

(being office Equipment bought)

office equipment are assets(refer @end of the answer)


investments in kamana trading co a/c Dr 20000

To cash a/c. 20000

(being investments made in kamana trading co)

investments and cash are assets..


Cash a/c Dr

To Capital a/c

(being cash brought in as capital)

cash is an asset and capital is a liability.


Note: Personal Car sold is not a transaction of business... it is personal..but the cash derived from the sale can be invested in the business..and therefore cash brought in as capital should be recorded...

However ..if the question is about Journal entries in the books of that person...(for Personal estimation)

then u can record it..

cash a/c Dr xxxx

To Car a/c. xxxx

(being car sold)


cash a/c Dr xxxx

To Capital a/c. xxxx

(being cash brought into the business)


All the above Transactions are made based on..the Three golden rules of accounting..

Personal account - Debit the receiver ,credit the giver

Real account - Debit what comes in ,credit what goes out

Nominal account -Debit All expenses and losses, credit All incomes and gains


Nominal accounts -all expenses losses Gains income come under it


Reference: Real account - all assets and Liabilities come under Real account