(iv) A shop in Adalt Bazar Patiala contracted to be taken on a rent a Rs. 4,000 pm 19. Paid wages/installation charges for erection of machinery 816 Wages and installation charges are the expenses of nominal nature. But for erection of machinery no separate account should be opened for such expenses because these expenses are of capital nature and it will be merged/debited to the cost of assets i.e. machinery. The journal entry is: Machinery Account Dr To Cash/Bank Account (Being wages/installation charges paid for the erection of machinery) Illustration: Journalise the following transactions for the month of January 2006: 2006 Jan.1 Invested in shares of Tata Cotton Mills Ltd. and paid for the same in cash Rs. 2,000. 2 Placed on order with Mr. Shah for goods to be received a month later Rs. 1,500. 3 Invoiced goods to Mr. Love worth Rs. 1,000 and allowed a trade discount of 2 per cent. 4 Carriage Rs. 25 and freight Rs. 70 were paid by the proprietor for the above goods but which are to be charged to Mr. Love Account 5 Paid rent to landlord of office premises. Rs. 150, which he spent on purchase of our goods. 6 Goods valued at Rs. 700 were delivered to Ahmedabad Merchants under instructions from Mr. Gobind. They were to be charged to the latter's Account 7 Mr. Love paid Rs, 500 due from him, and the same was spent on purchasing goods from Mr. Deepu. 8 Sold one old motor car belonging to the proprietor for Rs. 5,000 and the amount was invested in the business. 9 The proprietor paid Rs. 180 in full settlement of Mr. Manpreet for goods worth Rs. 200 purchased by him for personal use. 10 Mr. Gobind was declared insolvent and paid Rs. 450 in full settlement. The balance Rs. 250 was written off as a bad debt. 11 Mohinder our debtors, on our advice, directly paid Narinder, our creditor Rs. 2,000