Write Journal Entry for Krishna for the following transaction: 2014 March 1 ₹ 20,000 deposited with bank and opened account.

Question

★ Transaction of Bank :

Write Journal Entry for Krishna for the following transaction:

2014
March
1 ₹ 20,000 deposited with bank and opened account.
5 A cheque of ₹ 5,000 received from Hari, which immediately deposited with bank.
6 A cheque of ₹ 2,000 received from Ramaniklal for dues.
10 Goods sold to Rupali ₹ 14,000, out of which cheque received for half amount which deposited with bank.
12 Goods of ₹ 10,000 purchased from Deepkala and paid half amount by cheque.
15 ₹ 400 withdrawn from bank for personal expenses and ₹ 800 for office expense.
18 Life insurance premium ₹ 300 and fire insurance premium ₹ 450 paid by cheque.
20 Bank has approved overdraft of ₹ 25,000.
25 Bank has credited interest of ₹ 250 and debited bank charges of ₹ 100.
31 A cheque of ₹ 5,000 issued for foreign visit of son of owner from business.

Answer 1

Journal of Krishna

Explanation : Date

March 6 There is no mention about the type of cheque. On assuming that cheque is to be deposited into bank, Bank A/c is debited.
15 On withdrawing an amount from bank for personal expenses, Drawings A/c is debited while on withdrawing an amount for office expense, Cash A/c is debited because office expense yet is not paid.
20 Being a non-economic transaction, it will not be recorded.
25 Bank interest is an income for business, so Bank Interest A/c will be credited. While bank charges is an expense for business, so Bank Charges A/c will be debited.