Account head

Dear Sir/Madam,

 

I want know regarding a/c entry for Annual Maintenance Contract. I have paid fully AMC amount in advance.

 

So Kindly advice to regarding pass the journal entries.

 

Thank & B'regrads

 

Kirpa Nath Jha

+91-7838944477

Replies (10)

Repair & Maintenance Dr.

Prepaid Expenses        Dr.

Bank                                Cr.

I think AMC amount should be divided between current FY and next FY

Current FY amt is expense

Next FY is prepaid expense

 

 

Repairs dr      (current FY amt)

AMC dr          (total amount minus current FY amt)

   to cash/bank

1)

Dr.M/s .AMC contractor A/c

Cr.Bank A/c

Cr.TDS Deducted 194C

(being full payment for AMC paid in advance)

Note: Mandatory to deduct TDS on advance payment if it exceeds threshold limit as per 194C)

2)

Dr.R&M EXPENCES/MAINTAINANCE A/c

Cr.M/s.AMC Contractor A/c

 

Note: expences to be made by considering whether prepaid expences required or not

Agree with ganesh babu. 

First debit full amt in to contractor account by this entry

advance to contractor a/c(total advance paid)

        To bank(paid by bank)

        To TDS payble (tds amt)

 

Now whenever contractor provides you bill then do this entry

Repairs & maintenance a/c(by amt which is related to current year)

Prepaid R & M exp a/c(i by amt which is related to next financial year)

       To advance to contractor a/c (total advance paid earlier)

      To bank(full bill amt-advance amt)

     To TDS payble on(bill amt- advance amt)

 

1) Rep & Main(Exp)dr

Prepaid AMC(Current Asset)dr

to Contractor

2) Contractor Dr

to Cash

To TDs

1)At the time of Advance Payment :

  Party A/c    Dr

  To Cash/ Bank A/c

 To Tds on Contractor

2) At the time of booking of Exp:

Repair & Maintenance A/c    Dr

To Party A/c

aGREE WITH GANESH BABU SIR

Agree with MR. Ganesh bahu

Thanks

 

I think firstly we shoul know the Amt of AMC charges of yearly. If the charges exceed limt of TDS u/s 194 C then we will have to deduct TDS @  2% (IF Benificary is Company) or 1% (If benificiary is individual).

And paass the JV as follows :

E.g. if we will have to pay AMC charges to ABC Co. then entry will be :

1)ABC CO Cr.

  TDS (194C)Cr

   By  AMC Charges (Creat the ledger under Indirect Exp) Dr.

2) ABC Co Dr.

    To CASH/Bank A/c Cr.

 

 

Contractor a/c xxx Bank a/c Dr xxx Tds xxx

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