I am working in a sole proprietorship organisation. Last financial year my Proprietor gave Rs400000/- to his father and asked me to show this as unsecured loan. Accordingly I did it. But this month he made a gift deed saying that he has gifted that amount of Rs 4 lacs to his father.
What would be the accounting entries for this?
Proprietors Capital a/c Debit 4,00,000/-
Loan to Father (Asset side) credit 4,00,000/-
correct me if wrong
Ankur JAin is correct
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