Answer to Question #60137 in Accounting for Asif

Question

Bank ABC has rented a space from zebra trader to open up their branch. Following
transactions took place between the two parties: -
– On January 1st 2013, Bank ABC and Zebra Traders signed an agreement under which the
bank would rent the space at a charge of Rs.240, 000 per annum.
– On January 3rd, the bank issued a cheque of Rs.240, 000 in favor of Zebra traders.
– Assume that both parties adjust their accounts on a monthly basis.
A. Record the above transactions in books of Bank ABC and Zebra Traders.
B. What entry will be recorded in the books of Bank on March 31, 2013?
C. What entry will be recorded in the books of Zebra on March 31, 2013?

Answer 1

A. Record the above transactions in books of Bank ABC and Zebra Traders.
In this case such records will be recorded:
B. The record in the books of Bank on March 31, 2013 is:
Debit Credit
Rent 240,000 Accounts Payable 240,000
C. Tje entry recorded in the books of Zebra on March 31, 2013 is:
Debit Credit
Accounts Receivable 240,000 Buildings 240,000.