Furniture and Fixtures Journal Entry
Furniture and fixtures are considered fixed assets and are recorded on the balance sheet. When a business purchases furniture and fixtures, it needs to be recorded to reflect the increase in assets and the corresponding cash outflow or liability.
Scenario 1: Purchase of Furniture and Fixtures with Cash
A business purchases furniture and fixtures for ₹75,000 in cash.
Recording the Purchase with Cash
| Particulars | Debit (₹) | Credit (₹) |
|---|---|---|
| Furniture and Fixtures A/c | 75,000 | |
| To Cash/Bank A/c | 75,000 | |
| (Being furniture and fixtures purchased for cash) |
Explanation:
- Furniture and Fixtures A/c is debited to record the value of the newly acquired asset.
- Cash/Bank A/c is credited to reflect the cash outflow for the purchase.
Scenario 2: Purchase of Furniture and Fixtures on Credit
A business purchases furniture and fixtures for ₹75,000 on credit.
Recording the Purchase on Credit
| Particulars | Debit (₹) | Credit (₹) |
|---|---|---|
| Furniture and Fixtures A/c | 75,000 | |
| To Accounts Payable A/c | 75,000 | |
| (Being furniture and fixtures purchased on credit) |
Explanation:
- Furniture and Fixtures A/c is debited to record the value of the newly acquired asset.
- Accounts Payable A/c is credited to reflect the liability for the purchase.
Depreciation of Furniture and Fixtures
Furniture and fixtures are depreciated over their useful life. Here's an example of recording annual depreciation.
Scenario: Depreciation Expense for Furniture and Fixtures
Assume an annual depreciation expense of ₹10,000 for furniture and fixtures.
Recording Depreciation
| Particulars | Debit (₹) | Credit (₹) |
|---|---|---|
| Depreciation Expense A/c | 10,000 | |
| To Asset/Accumulated Depreciation A/c | 10,000 | |
| (Being annual depreciation recorded for furniture and fixtures) |
Explanation:
- Depreciation Expense A/c is debited to record the expense for the period.
- Accumulated Depreciation A/c/Asset is credited to reflect the cumulative depreciation on the asset.
