Question

Prepare Journal from the transactions given below :

		Rs
(a)	Cash paid for installation of machine	500
(b)	Goods given as charity	2,000
(c)	Interest charge on capital @ 7% p.a. when total capital were	70,000
(d)	Received Rs 1,200 of a bad debts written-off last year.
(e)	Goods destroyed by fire	2,000
(f)	Rent outstanding	1,000
(g)	Interest on drawings	900
(h)	Sudhir Kumar who owed me Rs 3,000 has failed to pay the amount. He pays me a compensation of 45 paise in a rupee.
(i)	Commission received in advance	7,000

Answer 1

Journal

S. No.

Particulars

L.F.

Debit Amount Rs

Credit Amount Rs

(a)

Machinery A/c

Dr.

500

To Cash A/c

500

(Cash paid for installation of machinery)

(b)

Charity A/c

Dr.

2,000

To Purchases A/c

2,000

(Goods given as charity)

(c)

Interest on Capital A/c

Dr.

4,900

To Capital A/c

4,900

(Interest on capital charged @ 7% p.a.)

(d)

Cash A/c

Dr.

1,200

To Bad Debt Recovered A/c

1,200

(Cash received on from debtors which was previously written off as bad)

(e)

Goods Destroyed by Fire A/c

Dr.

2,000

To Purchases A/c

2,000

(Goods destroyed by fire)

(f)

Rent A/c

Dr.

1,000

To Rent Outstanding A/c

1,000

(Rent due but not paid)

(g)

Drawings A/c

Dr.

900

To Interest on Drawings A/c

900

(Interest allowed on drawings)

(h)

Cash A/c

Dr.

1,350

Bad Debt A/c

Dr.

1,650

To Sudhir Kumar

3,000

(Sudhir Kumar declared insolvent and cash received from him 45 paise in a rupee in full settlement)

(i)

Commission A/c

Dr.

7,000

To Commission Received in Advance A/c

7,000

(Commission received in advance)

(Note: If it is assumed, commission in advance already credited as commission)

OR

Cash A/c

Dr.

7,000

To Commission Received in Advance

7,000

(Commission received in Advance)

(Note: If it is assumed, commission in advance not already credited as commission)

Total

22,500

22,500