Which of the following options is the correct journal entry for the given transaction? Office furniture is purchased from Modern Furniture for ₹45,000. ₹15,000 is paid by cash immediately and the balance of ₹30,000 is still payable.
Office Furniture A/c Dr. 45,000 To Cash A/c 15,000 To Modern Furniture A/c 30,000
Office furniture worth ₹45,000 was purchased from Modern Furniture. ₹15,000 was paid in cash and ₹30,000 remains payable. The correct journal entry is:
Office Furniture A/c Dr. 45,000
To Cash A/c 15,000
To Modern Furniture A/c 30,000
Office Furniture A/c is debited with the full purchase cost (₹45,000) as it is an asset coming in. Cash A/c is credited with ₹15,000 (cash going out), and Modern Furniture A/c (the supplier) is credited with the unpaid balance of ₹30,000 as a liability.
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