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What will be the journal entry of "co constructed a cycle shed by spending rupees 4000 and paid rupees 5,000 for fixtures and Fittings installed therein"?
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What will be the journal entry of "co constructed a cycle shed by spen...
Journal Entry for Construction of a Cycle Shed
When a company constructs a cycle shed by spending money on fixtures and fittings, a journal entry must be made in the accounting books. Here is an example of a journal entry:
Step 1: Determine the Account Types Involved
- Construction Expenses
- Fixtures and Fittings Expenses
- Cash
- Capital
Step 2: Determine the Amounts
- Construction Expenses: Rupees 4000
- Fixtures and Fittings Expenses: Rupees 5000
- Cash: Rupees 9000 (Rupees 4000 for construction expenses + Rupees 5000 for fixtures and fittings)
Step 3: Make the Journal Entry
The journal entry would be:
| Date | Account Title and Description | Debit | Credit |
|---|---|---|---|
| DATE | Construction Expenses | Rupees 4000 | |
| DATE | Fixtures and Fittings Expenses | Rupees 5000 | |
| DATE | Cash | Rupees 9000 | |
| DATE | Capital | Rupees 9000 |
Step 4: Explain the Journal Entry
The journal entry records the construction of a cycle shed by the company. The company spent Rupees 4000 on construction expenses and Rupees 5000 on fixtures and fittings. The company paid for these costs in cash, which was recorded as a credit in the cash account. The construction expenses and fixtures and fittings expenses were recorded as debits in their respective accounts. Finally, the transaction was balanced by recording a credit in the capital account, which represents the owner's investment in the company.
This journal entry would be posted to the company's general ledger and used to prepare the company's financial statements.
Community Answer
What will be the journal entry of "co constructed a cycle shed by spen...
Cycle shed a/c. Dr. 4000Fixtures and fit. a/c. Dr. 5000 To. cash. a/c. 9000
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What will be the journal entry of "co constructed a cycle shed by spending rupees 4000 and paid rupees 5,000 for fixtures and Fittings installed therein"?
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What will be the journal entry of "co constructed a cycle shed by spending rupees 4000 and paid rupees 5,000 for fixtures and Fittings installed therein"? for Commerce 2024 is part of Commerce preparation. The Question and answers have been prepared according to the Commerce exam syllabus. Information about What will be the journal entry of "co constructed a cycle shed by spending rupees 4000 and paid rupees 5,000 for fixtures and Fittings installed therein"? covers all topics & solutions for Commerce 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for What will be the journal entry of "co constructed a cycle shed by spending rupees 4000 and paid rupees 5,000 for fixtures and Fittings installed therein"?.
What will be the journal entry of "co constructed a cycle shed by spending rupees 4000 and paid rupees 5,000 for fixtures and Fittings installed therein"? for Commerce 2024 is part of Commerce preparation. The Question and answers have been prepared according to the Commerce exam syllabus. Information about What will be the journal entry of "co constructed a cycle shed by spending rupees 4000 and paid rupees 5,000 for fixtures and Fittings installed therein"? covers all topics & solutions for Commerce 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for What will be the journal entry of "co constructed a cycle shed by spending rupees 4000 and paid rupees 5,000 for fixtures and Fittings installed therein"?.
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