Journal Entry for Office Furniture Purchased with Cash
When a business purchases office furniture and pays for it in cash, it needs to record the transaction in its journal. The purchase of office furniture is a capital expenditure, which means it will be recorded as an asset in the company's books. Here's the journal entry for this transaction:
| Date | Particulars | Debit (₹) | Credit (₹) |
|---|---|---|---|
| 2024-06-07 | Office Furniture A/c | 40,000 | |
| To Cash A/c | 40,000 | ||
| (Being office furniture purchased and paid for in cash) |
Explanation:
- Office Furniture A/c is debited because it represents an increase in the asset account (office furniture).
- Cash A/c is credited because it represents a decrease in the asset account (cash), as cash is paid out.
