On July 01, 2011 Ashwani purchased a machine for `Rs.` 2,00,000 on credit Installation expenses `Rs.` 25,000 are paid by cheque. The estimated life is 5 years and its scrap value after 5 years will be `Rs.` 20,000. Depreciation is to be charged on straight line basis. Show the journal entry for the year 2011 and prepare necessary ledger accounts for first three years.

Explanation

Balance of Machine A/c as on 31.12.13 `Rs.` 1,22,500