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 2017 by cheque.
- Dr Rent A/c; Dr Bank A/c
- Dr Bank A/c; Cr Rent A/c
-
Dr Rent A/c; Cr Bank A/c
- Dr Rent A/c; Cr Mr. Roi
The correct answer is: C
Explanation
In the double-entry principle, we debit income and credit expenses.
The rent account will be debited with the sum of #50,000 in regards to the landlord (because money has been paid in as rent, e.i income), while the bank column will be credited with N50,000 (money has gone out of Mr. Rio bank account via the cheque that was issued to the landlord)