Question

What will be the double column cash book (Cash and Bank) entry for Ajinkya received Loan from his Friend Mr Virat Rs.5,00,000 for business @ 10% interest.

Answer 1

Mr. Virat Account will be added to the debit column of cash book.

• Here, the question relates to 'Cash Book'.
• Ajinkya is receiving a loan from his friend Mr Virat.
• The loan is amounted to Rs. 500000.
• He also has to pay back the loan money @ 10% interest.
• But, the interest won't be recorded as it will be recorded at the time of payment.
• Thus, there is no information regarding cheque so, it will be treated as cash.
• The Cash Book will be prepared with Double Columns i.e. Cash and Bank.

Answer 2

The entry in the double column cash book would be

Books of Ajinkya

Cash Book

cash. bank

To loan from Mr Virat a/c. Dr 500000. -

• Since money is being received the cash amount will be debited and nothing will go to the bank side.

• The interest of 10% will not be recorded because it is only recorded during the payment.