Bank A/C dr.
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Journal Entry for Cheque from Madhu being paid into Bank

When a cheque from Madhu is paid into the bank, it involves recording the transaction in the company's books to reflect the increase in the bank balance. This process is carried out through a journal entry. Let's break down the journal entry into the following headings:

1. Date and Particulars:
The first step in recording the journal entry is to mention the date of the transaction and the parties involved. In this case, the date will be the day the cheque is deposited into the bank account, and the particulars will include the name of the person or business (Madhu) who issued the cheque.

2. Debit and Credit:
The next step is to determine which accounts to debit and credit. In this scenario, the bank account is being increased, so it will be debited. On the other hand, Madhu's account is credited as their outstanding liability is being reduced.

3. Debit Bank Account:
To record the increase in the bank balance, the bank account is debited. The bank account is classified as an asset account in the general ledger, and as per the rules of double-entry bookkeeping, an increase in assets is recorded by debiting the account.

4. Credit Madhu's Account:
To reflect the decrease in the outstanding liability owed by Madhu, their account is credited. Madhu's account is a personal account in the general ledger. Personal accounts are credited when a decrease in liability or an increase in asset occurs in relation to that account.

5. Amount:
The final step is to mention the amount of the cheque being paid into the bank. This amount will be mentioned in both the debit and credit sides of the journal entry.

Example Journal Entry:

Date: [Date of transaction]

Particulars Debit Credit
-----------------------------------------------
Bank Account [Amount]
Madhu's Account [Amount]

By recording the journal entry for the cheque from Madhu being paid into the bank, the company's books accurately reflect the increase in the bank balance and the reduction in Madhu's outstanding liability.