Accounting treatment for Purchase of Fixed Assets, paid through Bank Account

Let's know, how to pass Financial Accounting entries for the transaction, when Fixed Assets are purchased in a business by payment through Bank Account(Cheque/NEFT/RTGS/IMPS/UPI etc.).

Pass Journal Entry for the above mentioned type of transaction, and then post them into their respective Ledger Accounts.

When Fixed Assets are purchased by payment through Bank Account,

Fixed Asset Account shows debit effect and

Bank Account shows Credit effect.

Journal Entry

Ledger Posting

In Fixed Assets Ledger Account

Purchase of Fixed Assets, paid through Bank Account - Posting in Fixed Asset Ledger Account.

In Bank Account.

Purchase of Fixed Asset, paid through Bank Account - Posting in Bank Ledger Account.

Example :

In the Books of M/s. Laxmi Tyres(Nature of Business - Trading of Tyre and Tubes). Purchased Computer for ₹46,900/- from M/s.Lotus Computer on dt.21/03/2022 as per Cash Memo No.LC/0045 received. Paid vide Cheque No-331020 of HDFC Bank Current Account No-0034.

In the above example,

Debit Ledger is :