Mr. Yuvraj, owes M/s Lal Chand ₹ 50,000. Now Yuvraj becomes insolvent and 60 paise in a rupee has been…
When Mr. Yuvraj becomes insolvent, Cash A/c is debited with ₹ 30,000 (60 paise per rupee on ₹ 50,000), Bad Debts A/c is debited with ₹ 20,000, and Yuvraj's Personal Account…
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Mr. Yuvraj, owes M/s Lal Chand ₹ 50,000. Now Yuvraj becomes insolvent and 60 paise in a rupee has been received from him.
In the journal entry, Yuvraj account will be credited with -
Answer and explanation
Correct answer B
When Mr. Yuvraj becomes insolvent, Cash A/c is debited with ₹ 30,000 (60 paise per rupee on ₹ 50,000), Bad Debts A/c is debited with ₹ 20,000, and Yuvraj's Personal Account is credited with the full ₹ 50,000 to close his account completely.
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