Journal In the Books of … 

Date  Particulars  L.F.  Debit Amount (₹)  Credit Amount (₹)  
(i)  Purchases A/c (WN)  Dr.  1,70,000  
To Arun’s A/c

34,000  
To Cash A/c

1,33,280  
To Discount Received A/c

2,720  
(Goods purchased and 80% payment made in cash)  
(ii)  Purchases A/c  Dr.  20,000  
To X’s A/c

20,000  
(Goods purchased on credit from X)  
Y’s A/c  Dr.  26,000  
To Sales A/c

26,000  
(Goods sold on credit to Y)  
(iii)  Cash A/c  Dr.  25,000  
Drawings A/c  Dr.  5,000  
To Bank A/c

30,000  
(Cash withdrawn from bank for personal and office use)  
(iv)  Loss by Fire A/c  Dr.  40,000  
To Purchases A/c

40,000  
(Goods destroyed by fire)  
(v)  Depreciation A/c  Dr.  10,000  
To Machinery A/c

10,000  
(Depreciation charged on machinery)  
(vi)  Prepaid Insurance A/c  Dr.  3,000  
To Insurance A/c

3,000  
(Insurance paid in advance)  
(vii)  Interest on Capital A/c  Dr.  5,000  
To Capital A/c

5,000  
(Allowed interest on capital)  
Drawings A/c  Dr.  1,000  
To Interest on Drawings A/c

1,000  
(Charged interest on drawings)  
(viii)  Cash A/c  Dr.  10,000  
Bad Debts A/c  Dr.  15,000  
To Sohan’s A/c

25,000  
(Cash received from Sohan and bad debts writtenoff)  
(ix)  Drawings A/c  Dr.  10,000  
To Bank A/c

10,000  
(Income tax paid)  
(x)  Salaries A/c  Dr.  1,00,000  
To Cash A/c

80,000  
To Outstanding Salaries A/c

20,000  
(Salary paid and outstanding)  
TOTAL  4,40,000  4,40,000  
Working Notes: Calculation of payment made and outstanding amount to Arun