I want to ask an journal entry. The question is :
•Furniture purchase of Rs. 50,000 by using Capital Reserve. What will be the journal entry of this above question??
Answers!
Practically you need to pay cash or cheque to buy furniture
So it should always be
Furniture dr
To party/bank/cash
If suppose we r purchasing furniture by giving share in capital. Entry should be
Furniture dr
To share capital
From a bookish point of view the entry in your case should be
Furniture dr
To capital reserve
Comment
Answer the question...
Practically you need to pay cash or cheque to buy furniture
So it should always be
Furniture dr
To party/bank/cash
If suppose we r purchasing furniture by giving share in capital. Entry should be
Furniture dr
To share capital
From a bookish point of view the entry in your case should be
Furniture dr
To capital reserve
Comment