1 Purchased land and a small office building The land was worth Rs 1,50,000 and the building worth - Accountancy - Recording of Transactions - I

Question

1 Purchased land and a small office building The land was worth Rs
1,50,000 and the building worth Rs 3, 50,000 The purchase price was
paid with Rs 3,00,000 cash and bills payable for Rs 5,00,000
2 Purchase new office equipment worth Rs 1,00,000 by paying Rs
93,000 cash and balance in exchange of old equipment (book value Rs
15,000) with a recorded value of Rs 7,000

4 Cash invested in shares Rs 50,000, brokerage paid 2%
jornal entry

Vipin Bansal · Accepted Answer

Dear Student

Journal

Date
Particulars
L F
Debit
Amount
(Rs)
Credit
Amount
(Rs)

Land A/c
Dr

1,50,000

Office Building A/c
Dr

3,50,000

Profit and Loss A/c*

3,00,000

To Cash A/c

3,00,000

To Bills Payable A/c

5,00,000

(Being land costing Rs 1,50,000 office building
costing Rs 3,50,000 purchased and Rs 3,00,000 paid in cash and
balance by accepting bills payable)

Office Equipment A/c
Dr

1,00,000

Profit & Loss A/c*
Dr

8,000

To Cash A/c

93,000

To Old Equipment A/c

15,000

(Being office equipment purchased for Rs
1,00,000 Rs 93,000 paid in cash and balance by replacement of old
equipment )

Shares A/c
Dr

50,000

Brokerage A/c
Dr

1,000

To Cash A/c A/c

50,000

(Being investment made in shares and brokerage
paid @2%)

*Excessive acceptance of B/P and exchanging an asset at lower value
is regarded as loss for the business

Regards

Journal
Date	Particulars		L.F.	Debit Amount (Rs)	Credit Amount (Rs)
	Land A/c	Dr.		1,50,000
	Office Building A/c	Dr.		3,50,000
	Profit and Loss A/c*			3,00,000
	To Cash A/c				3,00,000
	To Bills Payable A/c				5,00,000
	(Being land costing Rs.1,50,000 office building costing Rs.3,50,000 purchased and Rs.3,00,000 paid in cash and balance by accepting bills payable)

	Office Equipment A/c	Dr.		1,00,000
	Profit & Loss A/c*	Dr.		8,000
	To Cash A/c				93,000
	To Old Equipment A/c				15,000
	(Being office equipment purchased for Rs.1,00,000. Rs.93,000 paid in cash and balance by replacement of old equipment.)

	Shares A/c	Dr.		50,000
	Brokerage A/c	Dr.		1,000
	To Cash A/c A/c				50,000
	(Being investment made in shares and brokerage paid @2%)