Transfer Personal Assets to the Business Journal Entry
When personal assets are transferred to a business, it is typically recorded as an owner’s capital contribution. This increases the business’s assets and the owner’s equity in the business.
Scenario:
An owner transfers a personal vehicle worth ₹200,000 to the business.
1. Recording the Transfer of Personal Assets
| Date | Particulars | Debit (₹) | Credit (₹) |
|---|---|---|---|
| 2024-06-30 | Vehicle A/c | 200,000 | |
| To Owner’s Capital A/c | 200,000 | ||
| (Being personal vehicle transferred to the business) |
Explanation:
- Vehicle A/c is debited to recognize the asset now owned by the business.
- Owner’s Capital A/c is credited to reflect the increase in the owner's equity due to the contribution of the personal asset to the business.
Another Example:
An owner transfers office equipment worth ₹50,000 and cash of ₹20,000 to the business.
| Date | Particulars | Debit (₹) | Credit (₹) |
|---|---|---|---|
| 2024-06-30 | Office Equipment A/c | 50,000 | |
| Cash A/c | 20,000 | ||
| To Owner’s Capital A/c | 70,000 | ||
| (Being personal office equipment and cash transferred to the business) |
Explanation:
- Office Equipment A/c is debited to record the equipment now owned by the business.
- Cash A/c is debited to record the cash contributed to the business.
- Owner’s Capital A/c is credited to reflect the total value of the assets transferred by the owner to the business.
