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What will be entry for that: Busines strarted with brrowed
cash Rs. 25000 from Mr. X. if capital will be creadit.
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Answer / libin kulamuttom
In company's book the entry
will be:
By cash
To capital
(here the firm is liable to pay
the amount to the owner)
At the same time,the owner
will also maintain his own book.In his book the entry
will be:
By cash
To loan from mr x
(here the owner is liable to
pay the amount to mr.x)
Libinoxford@gmail.com
| Is This Answer Correct ? | 15 Yes | 4 No |
Answer / shikha
The above question is in reference to a "Sole Proprietorship" It will have two solutions:
Case I In this treatment, we would consider that the proprietor has taken the loan from Mr. X privately seperate of the business concern. In such a situation the entry in the books of the firm would be:
Cash A/c Dr. 25,000
To Capital A/c 25,000
(Being Capital introduced in business)
Case II In this we would assume that the loan is taken by the proprietor keeping the business into consideration. The entry would be:
Cash A/c Dr. 25,000
To Capital A/c 25,000
(Being Capital introduced in business)
Capital A/c Dr. 25,000
To Mr. X's Loan A/c 25,000
(Being Mr. X's Loan recognized for
financing capital)
| Is This Answer Correct ? | 4 Yes | 2 No |
Answer / jignesh& hiren
cash a/c cridit 25000/-
Mr. x a/c debit 25000/-
Mr.x a/c book entry
Mr, x a/c cridit 25000/-
cash a/c debit 25000/-
| Is This Answer Correct ? | 6 Yes | 5 No |
Answer / alok
the question clearly states that the business is started
with the amount taken as loan by third party. Loan and
capital both are liability of the business.
There should be considered if the proprietor wants to make
this loan as business loan or personal loan.
If the proprietor goes with business loan there should be
zero capital and business will be at full loan and without
equity(in such case the profit after exp and int. will be
the capital to the business).
Otherwise the capital will be there in business as equity
and proprietor will maintain the personal loan.
| Is This Answer Correct ? | 1 Yes | 0 No |
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