Record the journal entries for these transactions: 2079-4-1 Started business with Rs. 250,000 in cash and Rs. 50,000 bank balance. 2079-4-5 Paid Rs. 25,000 to house owner as rent, and Rs. 10,000 rent is still outstanding.

What you are being asked to record

You need to pass journal entries for (1) capital introduced into the business in cash and bank, and (2) rent where part is paid now and part is still payable (outstanding).

Entry for starting the business (capital introduced)

When the owner starts the business, the business receives assets (cash and bank). Assets increase on the debit side, and capital increases on the credit side.

2079-4-1

• Cash increases: debit $250{,}000$
• Bank balance increases: debit $50{,}000$
• Capital increases: credit the total $300{,}000$

Journal entry:

• Cash A/c Dr $250{,}000$
• Bank A/c Dr $50{,}000$
• To Capital A/c $300{,}000$

Entry for rent paid and rent outstanding

Rent is an expense, so record the full expense for the period (paid + outstanding).

Total rent expense: $$25{,}000 + 10{,}000 = 35{,}000$$

• Rent expense increases: debit $35{,}000$
• Cash decreases (paid): credit $25{,}000$
• Outstanding rent is a liability (still to be paid): credit $10{,}000$

2079-4-5 Journal entry:

• Rent A/c Dr $35{,}000$
• To Cash A/c $25{,}000$
• To Outstanding Rent A/c $10{,}000$

Quick check

After 2079-4-5, the Profit and Loss will include rent expense of Rs. 35,000, and the Balance Sheet will show Outstanding Rent (liability) of Rs. 10,000.