Prepare journal entries for the following transactions of Chuma's Hardware for May 2018: May 5, 2018: Bought a new motor vehicle for Sh 1,600,000 from Mwalimu Motors Ltd, paying Sh 600,000 in cash and

Bought a new motor vehicle for Sh 1,600,000 from Mwalimu Motors Ltd, paying Sh 600,000 in cash and the balance to be settled in equal monthly installments.

• Accounts affected: Motor Vehicle (Asset), Cash (Asset), and Mwalimu Motors Ltd (Liability - Creditor).
• Rules: Increase in asset (Motor Vehicle) is debited. Decrease in asset (Cash) is credited. Increase in liability (Mwalimu Motors Ltd) is credited.
• Calculations: Balance due to Mwalimu Motors Ltd = Sh 1,600,000 - Sh 600,000 = Sh 1,000,000.

$$\begin{array}{|l|l|l|l|} \hline \textbf{Date} & \textbf{Particulars} & \textbf{Debit (Sh)} & \textbf{Credit (Sh)} \\ \hline \text{May 5, 2018} & \text{Motor Vehicle Account} & 1,600,000 & \\ & \quad \text{To Cash Account} & & 600,000 \\ & \quad \text{To Mwalimu Motors Ltd Account} & & 1,000,000 \\ & \text{(Being purchase of motor vehicle, part cash, part credit)} & & \\ \hline \end{array}$$

Sold some old furniture for Sh 30,000 to Mwangaza school on credit.

• Accounts affected: Mwangaza School (Asset - Debtor) and Furniture (Asset).
• Rules: Increase in asset (Mwangaza School) is debited. Decrease in asset (Furniture) is credited.

$$\begin{array}{|l|l|l|l|} \hline \textbf{Date} & \textbf{Particulars} & \textbf{Debit (Sh)} & \textbf{Credit (Sh)} \\ \hline \text{May 12, 2018} & \text{Mwangaza School Account} & 30,000 & \\ & \quad \text{To Furniture Account} & & 30,000 \\ & \text{(Being sale of old furniture on credit)} & & \\ \hline \end{array}$$

Chuma the owner brought in her personal computer valued at Sh 35,000 to be used by the business.

• Accounts affected: Office Equipment/Computer (Asset) and Capital (Equity).
• Rules: Increase in asset (Office Equipment/Computer) is debited. Increase in owner's equity (Capital) is credited.

$$\begin{array}{|l|l|l|l|} \hline \textbf{Date} & \textbf{Particulars} & \textbf{Debit (Sh)} & \textbf{Credit (Sh)} \\ \hline \text{May 25, 2018} & \text{Office Equipment Account} & 35,000 & \\ & \quad \text{To Capital Account} & & 35,000 \\ & \text{(Being owner's contribution of personal computer to business)} & & \\ \hline \end{array}$$