prepare accounting equation:- 1)cash paid to rohit in full settlement. 2)cash received from manish. 3)cash withdrew for personal use.
(1) Cash balance is reduced on the Asset Side, Creditor(Rohit)balance is reduced on the Liabilities Side and Capital balance will be increased with the amount of discount received(Debt balance - Actual Amount paid).
(2) Cash balance is increased and Debtor(Manish)balance is reduced, both on the Assets side.
(3) Cash balance is reduced on the Assets side and Capital Balance is reduced (drawings).