Accounting entry

 

Sir,

My client has taken a selling  power from a Landlord and it has been register properly.  On the basis of power my client has taken as advance from other party by cheque to sell the land on behalf Landlord.

Now in the books of My my client how this transaction will be treated in his account.

Replies (1)

First of all you should inquire in whose bank account cheque is going to be deposited (i.e., your Client, or directly to Landlord) If amount is deposited in your clients account then entry will be as follows. Entries are explained by way of an example

Full Sale Value of Land: 1000000/-

Advance Received : 500000/-

Commission : 10000/-

1)On receipt of advance

                         Bank A/c Dr. 500000/-

                                     To Part A/c 500000/-

(Being Amount Received as advance against sale of Property)

2) On receipt of full and final payment  - Same as Above

3) On transfer of amount to Landlord

                       Land Loard A/c Dr. 1000000/-

                                           To Bank A/c         990000/-

                                           To Commission Income 10000/-

(Being Payment received for sale of Land transferred to Landlord after deduction of commission)

4) Closing of party account and landlord account

                                      Party A/c Dr. 1000000/-

                                               To Landlord A/c 1000000/-

(Being accounts adjusted)

 

If Cheque is deposited to landlord’s bank account, then you will receive the commission and entry for commission will as normal

Note: TDS has not been considered here if there is applicability of TDS then, your Commission received entry will be changed accordingly

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