Treatment for payment of insurence at the time of purchase

If we Pay insurence at the time of Purchase of vehicle Wether it treated as capital or revenue or revenue.

It will be debited to Prepaid A/c & treated as an other current asset.  After that the amount pertaining to teh F.Y. would be debited to Insurance a/c & the balance would be c/f.

The 1st premisum paid shall be treated as Capital Expenditure. Whereas the next premiums paid can be debited to Profit and Loss Account.

Regards,

Devendra Kulkarni

it is a capital expenditure.... angreed with Devendra

its is revenue expediture n should be trf to p&L a/c 

first insurance will be capitalised to the cost of vehicle....and all other will be debited to profit and loss a/c