Journal entries - Illustration 2

Advance Transactions - Illustration 2

August 1 Krishna commenced business with a Cash of Rs. 50,000
August 2 Deposited with Bank Rs. 10000
August 3 Sold goods to Kiran a customer Rs. 20000
August 4 Goods Sold for cash Rs. 5000
August 5 Purchases Rs. 2000
August 8 Bought Goods from Rajiv a Supplier for Rs. 4000
August 12 Returned goods by Kiran Rs. 1000
August 15 Paid Telephone Bill Rs. 500
August 16 Bought Furniture and paid by Cheque Rs. 12000
August 17 Goods Returned to Rajiv Rs. 300
August 18 Paid for advertisement Rs. 1500
August 19 Commission Received Rs. 450
August 22 Goods sold to Ramesh for cash Rs. 5000
August 25 Interest received from Nagesh Rs. 200
August 27 Cash received from Lal Rs. 2000
August 28 Received cash from Kiran Rs. 4000
August 29 Purchased goods from Ramu for cash Rs. 1200
***August 29 Rs. 3650 cash paid to Rajiv in full settlement of his account for Rs. 3700 (Discount received Rs 50)
***August 30 Received cash from Kiran Rs. 14600 in full settlement of his account from Rs. 15000 (Discount allowed Rs. 400).

Date	Particular	L.F (Ledger Folio)	Debit	Credit	Explanation
August 1 2008	Cash a/c.......Dr       To Capital A/c		50000	50000	Cash Comes in "DEBIT" Here KRISHNA brought cash into business. Cash came in to business "Debit" & KRISHNA bring cash as capital therefore KRISHNA capital a/c as "Credit".
August 2 2008	Bank a/c........Dr            To Cash A/c		10000	10000	Cash Goes Out "CREDIT" Cash going to the bank. We will credit Cash a/c & Debit Bank a/c
August 3 2008	Kiran A/c.......dr          To Sales a/c		20000	20000	Cash Comes in "DEBIT" but its a credit transaction "Debit Party Name" Instead of Cash A/c.
August 4 2008	Cash a/c........dr            To Sales A/c		5000	5000	Cash Comes in "DEBIT" We sold goods and cash coming In - Debit Cash A/c
August 5 2008	Purchase a/c ..........Dr     To Cash A/c		2000	2000	Cash going out "Credit" Here party name & cash word not given only purchase means you have purchased goods for cash and cash is going out.
August 8 2008	Purchase a/c ..........Dr     To Rajiv's A/c		4000	4000	Cash going out "Credit" (Future Transaction) Goods purchased from Rajiv (party name mentioned) & word cash is not given. It's a credit transaction - "Credit Party Name"
August 12 2008	Sales Return a/c......Dr    To Kiran A/c		1000	1000	The Word (By Kiran) is very important. goods return by kiran means we sold goods to kiran and kiran return good to us. We Sold - Sales Return (Goods coming in - "Debit")
August 15 2008	Telephone Bill A/c ......Dr      To Cash A/c		500	500	Cash Goes Out "CREDIT" Cash going out as we paid telephone bill - Credit Cash A/c
August 16 2008	Furniture A/c ........Dr    To Bank A/c		12000	12000	Cash Goes Out "CREDIT" - **Through Cheque Cash going out as cheque - Credit Bank A/c instead of Cash as we paid it though Cheque
August 17 2008	Rajiv's A/c ........Dr     To Purchased Return A/c		300	300	The Word (To Rajiv) is very important. goods return To Rajiv means we purchased goods from Rajiv and returning good to Rajiv. We Purchased - Purchased Return (Goods going out - "Credit")
August 18 2008	Advertisement Exp. A/c...dr    To Cash A/c		1500	1500	Cash Goes Out "CREDIT" Cash going out as we paid advertisement expenses - Credit Cash A/c
August 19 2008	Cash A/c............Dr      To Commission Received		450	450	Cash Comes in "DEBIT" Cash coming in - we received commission "Debit Cash A/c"
August 22 2008	Cash A/c............Dr      To Sales A/c		5000	5000	Cash Comes in "DEBIT" Cash coming in - goods sold "Debit Cash A/c"
August 25 2008	Cash A/c............Dr      To Interest Received A/c		200	200	Cash Comes in "DEBIT" Cash coming in - As we received Interest "Debit Cash A/c"
August 27 2008	Cash A/c............Dr      To Lal  A/c		2000	2000	Cash Comes in "DEBIT" Cash coming in - As we received from LAL "Debit Cash A/c"
August 28 2008	Cash A/c............Dr      To Kiran A/c		4000	4000	Cash Comes in "DEBIT" Cash coming in - As we received from KIRAN "Debit Cash A/c"
August 29 2008	Purchased A/c...dr    To Cash A/c		1200	1200	Cash Goes Out "CREDIT" Cash going out as we Purchased goods for Cash - Credit Cash A/c
August 29 2008	Rajiv a/c .......Dr     To Cash A/c     To Discount Received A/c		3700	3650 50	Cash Goes Out "CREDIT" Cash going out as we Paid Cash to Rajiv - Credit Cash A/c & We received discount therefore write discount received below To cash a/c 3650 with discount received amount 50. (As discount received entry we pass regularly as  cash a/c dr to discount received a/c - discount received comes in credit side)
August 30 2008	Cash a/c........dr Discount Allowed a/c ....Dr     To Kiran's A/c		14600 400	15000	Cash comes in "DEBIT"  Cash coming in but not fully out of 15000 we are receiving 14600 cash and we giving discount 400 rupees. Therefore debit cash a/c with 14600 & debit discount allowed a/c 400 and total 15000 will be credited as To Kiran A/c