Acconting of subsidy

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

28 October 2011 INCASE I AM MANAGING COMPANY ACCOUNTS AND MY COMPANY TAKES A LOAN OF Rs. 500000 AND FROM WHICH WE RECEIVE Rs. 100000 SUBSIDY WHAT SHOULD BE ACCOUNTING ENTRY TELL ME IN DETAIL WITH GROUPING INFORMATION

Dintakurthi Tirumala

Dintakurthi Tirumala (Expert)
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28 October 2011 1)if the subsidy amount adjusted to the loan account by the bank then
Bank Loan a/c dr 100000
To Asset a/c 100000
2)if the subsidy amount deposited as Fixed/Term Deposit by the bank then
Fixed/Term Deposit a/c dr 100000
To Asset a/c 100000

Alternative to above 1
Bank loan a/c dr
To Subsidy Received a/c
(Being subsidy received)
and
Subsidy Received a/c dr
To Asset a/c
(Being subsidy received amount written off to the Asset)
Alternative to above 2
Fixed deposit a/c dr
To Subsidy received a/c
and
Subsidy Received a/c dr
To Asset a/c

Or any other treatment depending on the method of accounting you followed for any clarification better to consult your CA.
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