JOURNAL ENTRY FOR PLOT PURCHASE

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WHAT WILL BE JOURNAL ENTRY FOR NBELOW AND UNDER WHICH HEAD TO SHOW

 

PLOT PURCAHSE BY THE PROPRIETOR  FOR PERSONAL USE AND PAYMNET MADE FROM FRIM ACCOUNT

1 } ADVANCE PAID TO SELLER

2} BALANCE FINAL AMOUNT PAID TO SUPPLIER

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Quick Summary
This discussion clarifies the journal entries required when a proprietor purchases a plot for personal use, with payment made from the business's bank account. It details two key entries: one for the advance payment to the seller and another for the final balance payment. The entries distinguish between personal advances and the investment in the plot as a non-current asset, while noting the use of the firm's cash or bank account.

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

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