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Accounting entry needed


rima (ca)     13 July 2017

rima
ca 
 1 likes  142 points

| My Other Post

Your company gives a coffee machine to a client free of cost on the condition that all the materials needed for the coffee machine needs to be purchased from the company itself for 3 years. After 3 years the coffee machine becomes of the client.

What is the journal entries for the company giving the machine and the client?

avater

Balasubramanian R (Chartered Accountant)     13 July 2017

Balasubramanian R
Chartered Accountant 
 4 likes  82 points

View Profile | My Other Post

1. Debit                            Coffee Machine Account (Cost)

2. Provide Deprciation @ 15% (1st and 2nd Year)

3. At the end of 3rd year write off fully the balance in Coffee Machine account debiting Deprciaion Account.

No entry in Client books for Coffee Machine.

Pass entry for regular purchase and sale  of materials in both books.

 

avater

Balasubramanian R (Chartered Accountant)     13 July 2017

Balasubramanian R
Chartered Accountant 
 4 likes  82 points

View Profile | My Other Post

1. Debit                            Coffee Machine Account (Cost)

2. Provide Deprciation @ 15% (1st and 2nd Year)

3. At the end of 3rd year write off fully the balance in Coffee Machine account debiting Deprciaion Account.

No entry in Client books for Coffee Machine.

Pass entry for regular purchase and sale  of materials in both books.

 

1 Like
avater

Rama chary Rachakonda (Master in Accounts & Lawyer email ID:ramachary64@gmail.com voice no:9989324294)     14 July 2017

Rama chary Rachakonda
Master in Accounts & Lawyer email ID:ramachary64@gmail.com voice no:9989324294 
 69 likes  1161 points

View Profile | My Other Post

In my opinion, 

(1) debit coffee machine account (with cost)

credit Bank account.

(2) depreciation account ( with value of depreciation) 

credit coffee machine account ( for 1 & II years depreciation respectively)

(3) Advertisement account debit (with balance amount)

depreciation account debit

to coffee machine account.


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