Journal Entry for Selling Household Furniture and Investing the Proceeds to Business:

There are two transactions involved in this scenario: selling household furniture and investing the proceeds to business. Therefore, we need to make two journal entries as follows:

Journal Entry 1: Selling Household Furniture

When we sell household furniture, we need to record the transaction in the books of accounts. The journal entry for selling household furniture is as follows:

Debit: Cash/Bank Account - 15000
Credit: Furniture Account - 15000

Explanation:

- Debiting the Cash/Bank Account (an asset account) means we are increasing the balance of this account as we have received cash/bank for selling the furniture.
- Crediting the Furniture Account (an asset account) means we are decreasing the balance of this account as we no longer have the furniture in our possession.

Journal Entry 2: Investing the Proceeds to Business

When we invest the proceeds from the sale of household furniture to the business, we need to record the transaction in the books of accounts. The journal entry for investing the proceeds to business is as follows:

Debit: Business Account - 15000
Credit: Cash/Bank Account - 15000

Explanation:

- Debiting the Business Account (an asset account) means we are increasing the balance of this account as we are receiving the proceeds from the sale of furniture as an investment in our business.
- Crediting the Cash/Bank Account (an asset account) means we are decreasing the balance of this account as we are investing the proceeds in our business.

Conclusion:

Recording journal entries is an essential part of accounting as it helps in maintaining accurate and reliable financial records. In this scenario, we have made two journal entries - one for selling household furniture and another for investing the proceeds to business. By making these journal entries, we can keep track of our financial transactions and ensure that our books of accounts are up-to-date.

Cash a/c. Dr. 15000 To capital a/ c. 15000