Question

Pass a journal entry if a machine having a book value of ₹ 15,000 is given to Rakesh, a creditor of ₹ 22,000 for ₹ 12,000 against his dues?

Answer 1

Journal Entry
Date	Particulars	L.F.	Debit (₹)	Credit (₹)
	Realisation A/c   ...Dr.		10,000	-
	To Cash/Bank A/c		-	10,000
	(Being the remaining balance paid to creditor Rakesh after deducting the value of the machine.

Working Note:

Net Cash Payable = Total debt due to Creditor − Agreed value of Machine taken over

= 22,000 − 12,000

= 10,000