HELLO FRIENDS, IF A CAR IS CAPITALISED IN THE BOOKS AND CAR LOAN IS ALSO IN THE BOOKS MY CLIENT PAYS THE CASH IN THE SAVINGS ACCOUNT AND INSTALLMENT OF CAR LOAN IS PAID FROM THE SAVINGS ACCOUNT.
NOW WHAT IS THE ACCOUNTING ENTRY FOR IT
CAPITAL A/C
TO CASH
WHEN CASH IS WITHDRAWN AND DEPOSITED INTO THE SAVINGS A/C
LOAN A/C
TO CAPITAL A/C
WHEN LOAN IS PAID FROM SAVINGS A/C.
IS THIS TREATMENT CORRECT.
PLS. HELP ME.
If you consolidate the both entries then you will get the following entry:
Loan A/c Dr. 10000/-
To Cash Cr. 10000/-
But you should follow your treatment to book the entries in books.
hi,
2nd entry should be
Loan A/c Dr
To Bank a/c
because if u do the above entry then u r increasing ur capital.
BUT SAVINGS ACCOUNT IS NOT SHOWN INTO THE BOOKS OF ACCOUNTS.
loan a/c dr .......
to capital a/c ............
capital a/c dr ............
to cash a/c
SSGS and Associates
Chennai
CA Inter
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Rahul Dang & Associates-Chartered Accountants
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