Suggest me how to pass entries

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I have just started business in proprietor ship firm but I have no money so I borrow money from my friend in cash Rs. 100000 (one lac only) on interest how to pass entry pls tell me & also interest paid entry
Replies (3)

A) When money borrowed from friend --

Cash or Bank A/c             Dr 100000

    To Loan from Friend (Mr. A)            100000

(Being loan taken from friend)

B) Introducing capital to the new business --

Cash A/c                         Dr      100000

    To Capital A/c

(Being business started with cash)

C) Every time When paying the borrowed money with interest to friend --

Loan from Friend (Mr. A)      Dr.  10000

Interest on loan A/c             Dr.    400 (supposed)

   To Cash or Bank A/c

(Being part payment of loan paid to Mr. A)

 

 

 

It's legal that I can take loan from my friend in cash rs. 100000 one lac
Yes, it's absolutely legal,,,


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