On 1st Jan 2012, Mallam Dangote commenced a trading business with N100,000 cash and a cheque of N70,000 from…

Question

On 1st Jan 2012, Mallam Dangote commenced a trading business with N100,000 cash and a cheque of N70,000 from lottery. Record these transactions in a journal entry.

ScanSolve AI Tutor · Accepted Answer

Here are the journal entries for the given transactions.

3 (a)
Mallam Dangots commenced business by introducing personal cash and a cheque as capital.

\begin{array}{|l|l|r|r|} \hline \textbf{Date} & \textbf{Particulars} & \textbf{Debit (N)} & \textbf{Credit (N)} \\ \hline \text{2012 Jan 1} & \text{Cash Account} & 100,000 & \\ & \text{Owner's Capital Account} & & 100,000 \\ & \textit{(Being cash introduced as capital)} & & \\ \hline \text{2012 Jan 1} & \text{Bank Account} & 70,000 & \\ & \text{Owner's Capital Account} & & 70,000 \\ & \textit{(Being cheque introduced as capital)} & & \\ \hline \end{array}

3 (b)
On 2nd Jan 2012, transactions include depositing cash into the bank, paying for business expenses, and acquiring furniture and fittings.

Record the deposit of cash into the business bank account.
Cash decreases (credit) and Bank increases (debit).
Record the payment for business expenses.
General Expenses and Agreement Fees are expenses (debit), and Cash decreases (credit).
Record the acquisition of furniture and fittings paid by cheque.
Furniture and Fittings (asset) increases (debit), and Bank (asset) decreases (credit).
$\boxed{ \begin{array}{|l|l|r|r|} \hline \textbf{Date} & \textbf{Particulars} & \textbf{Debit (N)} & \textbf{Credit (N)} \\ \hline \text{2012 Jan 2} & \text{Bank Account} & 45,000 & \\ & \text{Cash Account} & & 45,000 \\ & \textit{(Being cash deposited into bank)} & & \\ \hline \text{2012 Jan 2} & \text{General Expenses Account} & 4,200 & \\ & \text{Agreement Fees Account} & 1,500 & \\ & \text{Cash Account} & & 5,700 \\ & \textit{(Being expenses paid in cash)} & & \\ \hline \text{2012 Jan 2} & \text{Furniture and Fittings Account} & 25,000 & \\ & \text{Bank Account} & & 25,000 \\ & \textit{(Being furniture and fittings acquired by cheque)} & & \\ \hline \end{array} }$

On 1st Jan 2012, Mallam Dangote commenced a trading business with N100,000 cash and a cheque of N70,000 from lottery. Record these transactions in a journal entry.

Step-by-step solution

Record the deposit of cash into the business bank account.

Record the payment for business expenses.

Record the acquisition of furniture and fittings paid by cheque.

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