Show how the following transaction will be recorded applying the double entry principle: Rent ₦50,000 was paid by Mr. Roi to his landlord on 1st July, 20 × ...

Show how the following transaction will be recorded applying the double entry principle:
Rent ₦50,000 was paid by Mr. Roi to his landlord on 1st July, 20 × 7 by cheque.

Answer Details

The following transaction will be recorded as: Dr Rent A/c; Cr Bank A/c The double entry principle states that for every financial transaction, there must be a corresponding debit (Dr) and credit (Cr) entry in the accounting records. In this case, the payment of rent by Mr. Roi would be recorded as a debit to the Rent account, representing an increase in the company's obligation to pay rent. This debit entry is offset by a credit to the Bank account, representing a decrease in the company's cash balance. This double entry ensures that the accounting records accurately reflect both the increase in the company's obligation to pay rent and the decrease in its available cash.