Example 5 Write up the asset , capital and liability accounts in the books of M/Crash following transactions: 2002 June Started business with Sh.50,000 in the bank. 2 Bought motor van paying by cheque Sh.12,000 5 Bought Fixtures Sh.4,000 on credit from Office Masters Ltd. 8 Bought a van on credit from Motor Cars Ltd Sh.8,000 12 Took Sh.1,000 out of the bank and put it into the cash till. 15 Bought Fixtures paying by cash Sh.600 19 Paid Motor Cars Ltd by cheque Sh.8000 21 A loan of Sh.10,000 cash is received I from J Marcus. 25 Paid Sh.8,000 of the cash in hand into the bank account. 30 Bought more Fixtures paying by cheque Sh.3,000

t Accounts:<br /><br />1. Bank Account: Debit $Sh.50,000$ (June 1)<br />2. Motor Van Account: Debit $Sh.12,000$ (June 2)<br />3. Fixtures Account: Debit $Sh.4,000$ (June 5)<br />4. Van Account: Debit $Sh.8,000$ (June 8)<br />5. Cash Till Account: Credit $Sh.1,000$ (June 12)<br />6. Fixtures Account: Debit $Sh.600$ (June 15)<br />7. Van Account: Debit $Sh.8,000$ (June 19)<br />8. Fixtures Account: Debit $Sh.3,000$ (June 30)<br /><br />Capital Account:<br /><br />1. Capital Account: Credit $Sh.50,000$ (June 1)<br /><br />Liability Accounts:<br /><br />1. Office Masters Ltd. Account: Credit $Sh.4,000$ (June 5)<br />2. Motor Cars Ltd. Account: Credit $Sh.8,000$ (June 8)<br />3. J Marcus Loan Account: Credit $Sh.10,000$ (June 21)<br /><br />Explanation:<br /><br />1. On June 1, the business was started with $Sh.50,000$ in the bank, which is an asset. The capital account is credited with the same amount as it represents the owner's investment in the business.<br />2. On June 2, a motor van was bought for $Sh.12,000$ by paying by cheque. This amount is debited to the motor van account, which is an asset account.<br />3. On June 5, fixtures were bought on credit from Office Masters Ltd. for $Sh.4,000$. This amount is credited to the Office Masters Ltd. account, which is a liability account.<br />4. On June 8, a van was bought on credit from Motor Cars Ltd. for $Sh.8,000$. This amount is credited to the Motor Cars Ltd. account, which is a liability account.<br />5. On June 12, $Sh.1,000$ was taken out of the bank and put into the cash till. This amount is credited to the cash till account, which is an asset account.<br />6. On June 15, fixtures were bought for $Sh.600$ by paying in cash. This amount is debited to the fixtures account, which is an asset account.<br />7. On June 19, Motor Cars Ltd. was paid by cheque for $Sh.8,000$. This amount is debited to the van account, which is an asset account.<br />8. On June 30, more fixtures were bought for $Sh.3,000$ by paying by cheque. This amount is debited to the fixtures account, which is an asset account.