When a merchant starts a new business, they need to record the financial transactions in a proper format. This is done by using a journal entry, which is a record of all the financial transactions that occurred during a specific period.



The journal entry for a merchant starting a business with Rs 10,000 would be as follows:

Debit: Cash Account - Rs 10,000

Credit: Capital Account - Rs 10,000



The above journal entry represents the two accounts that are affected by the transaction.

The Cash account is debited, which means that the merchant received cash of Rs 10,000. This is because the merchant invested Rs 10,000 of their personal funds into the business.

The Capital account is credited, which means that the merchant's capital has increased by Rs 10,000. This is because the merchant is the sole owner of the business and has invested their personal funds into the business.



In conclusion, the journal entry for a merchant starting a business with Rs 10,000 involves debiting the Cash account and crediting the Capital account. This entry represents the initial investment made by the merchant in the business and helps in keeping a proper record of the financial transactions.