Journalise the following transaction Mr sarthak started the business with the following assets and liabilities Cash rs 15000 ,bank of baroda (cr) rs 4000, building rs 256000, plant rs 91000. Investment in 15% debentures rs 20000 Loan from ashish rs6000 . Patents rs 13000?

Question

Answer

Journal Entry for Mr. Sarthak Starting the Business

Introduction:
When Mr. Sarthak starts his business, he brings in various assets and liabilities to establish the business. These assets and liabilities need to be recorded in the books of accounts using journal entries. The journal entries help in maintaining the financial records of the business and provide a clear picture of the company's financial position. In this case, Mr. Sarthak brings in cash, bank balance, building, plant, investment in debentures, loan, and patents as assets and liabilities. Let's journalize these transactions step by step.

Journal Entries:

1. Cash brought into the business:

Debit: Cash (Asset) - Rs 15,000

Credit: Capital (Owner's Equity) - Rs 15,000

Explanation: Mr. Sarthak invests cash of Rs 15,000 into the business, which increases the cash asset and the capital of the owner.

2. Bank balance brought into the business:

Debit: Bank of Baroda (Current Asset) - Rs 4,000

Credit: Capital (Owner's Equity) - Rs 4,000

Explanation: Mr. Sarthak brings in a bank balance of Rs 4,000, which increases the bank balance asset and the capital of the owner.

3. Building brought into the business:

Debit: Building (Fixed Asset) - Rs 2,56,000

Credit: Capital (Owner's Equity) - Rs 2,56,000

Explanation: Mr. Sarthak brings in a building worth Rs 2,56,000, which increases the building asset and the capital of the owner.

4. Plant brought into the business:

Debit: Plant (Fixed Asset) - Rs 91,000

Credit: Capital (Owner's Equity) - Rs 91,000

Explanation: Mr. Sarthak brings in a plant worth Rs 91,000, which increases the plant asset and the capital of the owner.

5. Investment in Debentures:

Debit: Investment in Debentures (Investment Asset) - Rs 20,000

Credit: Capital (Owner's Equity) - Rs 20,000

Explanation: Mr. Sarthak invests Rs 20,000 in debentures, which increases the investment in debentures asset and the capital of the owner.

6. Loan from Ashish:

Debit: Loan from Ashish (Liability) - Rs 6,000

Credit: Capital (Owner's Equity) - Rs 6,000

Explanation: Mr. Sarthak takes a loan of Rs 6,000 from Ashish, which increases the loan liability and the capital of the owner.

7.

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