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Accounting entry
Mr A take a car loan but the instalments are paid by his wife Mrs.B . Mrs. B is using the car and having prof income. Mr. A is having salary income. Can Mrs B claim depreciation and intt.
also the accounting entry to be passed in Mrs. B books
Replies (5)
Mrs.B can't claim depreciation & intt. It is generally loan given by Mrs.B to Mr.B.
Accounting entry will be
Mr.B
To Bank
Accounting entry will be
Mr.B
To Bank
Depreciation cannot be claimed by Mrs. B, since the loan is taken in the name of Mr. A. So, the owner of the asset shall be Mr. A and depreciation shall be claimed by him.
The accounting entry to be passed by Mrs. B for paying the instalment is:
Mr. A a/c Dr
To Bank a/c Cr.
Depreciation calculated on Fixed Asset.
If the car is fixed asset of Mr. A. then B can't take the deduction benefit of Depreciation. that means Mr. B can't declare this car as fixed asset.
In the book of Mr. B the Accounting entry Should Be:-
Mr. A .... Dr. (Current Asset)
To Bank / Cash...........
(Being unsecure car loan given to Mr. A)
Sorry its
Mr.A
To Bank
Mr.A
To Bank
sell car to Mrs B and transfer loan also to Mrs B
then only you can claim depreciation
then only you can claim depreciation
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