Journal entry

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pooja (Querist)
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17 August 2012 hello.... i want to know wat will be the journal entry passed for starting business by taking loan....it shud be cash debit, loan credit..... dat means there will be no capital.... pls answer my query

K Srinivas, CMA CS

K Srinivas, CMA CS (Expert)
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18 August 2012 If the business is started with 100% loan capital, then this is how the entry will be:

Cash/Bank a/c Dr
to Loan a/c

However, no one will lend if the business owner has no funds to invest on his own and if the business owner is totally dependent on loan capital.