Journal entry of busniess expenses
This query is : Resolved
Allauddin Patel
(Querist)
02 September 2026
What would be correct journal entry for the office rent business expense paid through savings account of proptietor ?
02 September 2026
Practical Considerations
If TDS is Applicable (Sec 194I / 194IB):
If tax deduction at source applies to the rent payment, record the entry as:
Debit: Office Rent A/c (Total Rent Expense)
Credit: TDS Payable A/c (Tax Deducted Amount)
Credit: Proprietor's Capital A/c (Net Amount Paid from Personal Savings)
When a proprietor pays a business expense using personal savings, debit Office Rent A/c to record the business expense and credit Proprietor's Capital A/c to record the additional capital introduced into the firm.
If TDS is Applicable (Sec 194I / 194IB):
If tax deduction at source applies to the rent payment, record the entry as:
Debit: Office Rent A/c (Total Rent Expense)
Credit: TDS Payable A/c (Tax Deducted Amount)
Credit: Proprietor's Capital A/c (Net Amount Paid from Personal Savings)
When a proprietor pays a business expense using personal savings, debit Office Rent A/c to record the business expense and credit Proprietor's Capital A/c to record the additional capital introduced into the firm.
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