Question

Record the general journal entries.

Answer 1

Below are the journal entries from the point of view of Company:

1. Motor Vehicle ......3000 Debit

To Equity Shares .......3000 Credit

Being equity shares issues in return of Motor vehicle

2. Bank A/c........8000 Debit (as money received)

To Loan Payable to Grand Bank......8000 Credit

Loan amount received

3. Depreciation ----500 Debit

To Motor Vehicle....500 Credit

Being Motor Vehicle depreciated.

4. Interest......100 Debit

To Bank a/c.......100 Credit

Quarterly entry for interest paid