Question

write a journal entry for the following transaction . paid rs. 2500 for life insurance premium .​

Answer 1

To Cash/bank A/c Cr.5000

(Being life insurance paid from cash/bank account, drawing account is debited because the insurance premium is paid for a person who is not related to business transaction. Any amount withdrawn from business for "personal use" is treated as drawing.

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Another way to visualize business transactions is to write a general journal entry. Each general journal entry lists the date, the account title(s) to be debited and the corresponding amount(s) followed by the account title(s) to be credited and the corresponding amount(s).