JOURNAL ENTRY FOR PLOT PURCHASE

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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