JOURNAL ENTRY FOR PLOT PURCHASE

Here are the journal entries for the plot purchase by the proprietor for personal use:

 1. Advance paid to seller: Debit: Advances (Personal) [xxx] Credit: Cash/Bank [xxx] (Being advance paid to seller for purchase of plot for personal use)

1. Balance final amount paid to supplier: Debit: Investment in Plot (Personal) [xxx] Credit: Cash/Bank [xxx] (Being balance amount paid to supplier for purchase of plot for personal use) 

Note: - Advances (Personal) is a current asset account. - Investment in Plot (Personal) is a non-current asset account. - Cash/Bank is a current asset account. 

The above journal entries are from the proprietor's personal accounting perspective. If the plot is purchased for business purposes, the journal entries 

thanks you for clarifyng

A personal plot paid from the firm's account is drawings:

• Proprietor buys a plot for personal use, paid from the business account: Dr Drawings (Proprietor's Capital), Cr Bank. Don't show the plot in the business balance sheet.

• Stamp duty and registration paid from the business: also drawings.

• Tax: the plot is a personal capital asset. Cost for future capital gains = price + stamp duty + registration. TDS under 194-IA if the consideration is Rs 50 lakh or more. Sec 56(2)(x) applies if bought below the stamp duty value by more than 10%.

• If financed by a business loan, interest on that portion isn't deductible as a business expense.