Dear Experts,
Capital subsidy has been received by a firm. To purchase the asset the firm has taken term loan from a bank. Now the bank has received the capital subsidy, for which the bank has reduced the o/s term loan to the extent the capital subsidy has been received.
In such a case accounting entry passed below is right?

Term Loan A/c Dr. 500000
To Fixed Assets A/c 500000
(being the capital subsidy received by the bank)

Is the above entry correct?

With regards,
Rajesh.

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Regards
Mrityunjay