Capital Expenditure is that expenditure that is made while purchasing any asset or acquiring any asset in business.
Example suppose If we have Purchased a Machinery and paid its carriage and installation charges there are some expense which we made while purchasing an asset, therefore, they will be added to the cost of machinery.
Example Machinery Purchased Rs 100000 and paid Rs.4000 on its installation and paid Rs 6000 on cartage.
hence the nature of expense is Capital:
Journal entry for the same will be
Machinery A/c
|
110,000
|
To Cash A/c
|
` 110000
|
BEING MACHIENRY PURCHASED
|
Example:
Suppose we owned a Mutiplex cinema where we have arrangement of 100 seats if we want to incease the size of mutiplex by adding 50 more seats by investing Rs 100000 on chairs Rs 20,000 on installation Rs 40,000 on repairthen the journal entry for the same will be.
Furniture and
Fixture A/c Dr
|
1,60,00
|
To Cash A/c
|
` 160000
|
BEING SEATS
ADDED IN MUTIPLEX
|
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What are journal entry of expenses and income in accounting · September 27, 2021 at 10:55 pm
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