Make journal entries for the following transactions
- Mr A with an intention to expand his business requested Mr B to lend him Rs 15000
- Mr B could spare only rs 10000 and paid the amount to Mr A
For the first point, there won’t be any Journal entry as we just record those transactions which can be expressed in monetary terms. In this case, it is a mere intention of Mr. A to approach Mr. B for borrowing purpose. Therefore, we won’t record it in the books of Mr. A.
For the second point, Mr. A, received only Rs 10,000 against his request for Rs 15,000 from Mr. B. Therefore, it can be concluded that in this point only Rs 10,000 has been transacted between Mr. B and Mr. A. Therefore, the following is the Journal entry in the books of Mr. A.
Books of Mr A Journal | |||||
Date | Particulars | L.F. | Debit Amount (Rs) | Credit Amount (Rs) | |
| Cash A/c | Dr. |
| 10,000 |
|
| To Loan from Mr. B |
|
| 10,000 | |
| (Loan taken from Mr. B for expansion of business) |
|
|
| |
|
|
|
|
| |
This is similar to Mr. B lending Rs 10,000 to Mr. A.