What would be the entry for 'Loan to employee rupee xyz adjusted with Salary" ?
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Adjusment entries related to advance salary
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Salary(expense) a/c Dr.
To loan to employee
To salary payable
(Being salary expense booked and loan amount adjusted against the salary)
For instance if salary of the employee is ₹10,000 p.m. and we have to adjust loan of ₹2000 then :
Salary a/c Dr. 10,000
To loan to employee. 2000
To salary payable. 8000
Salary Advance............. Dr.
To Bank/Cash
(Being Advance against salary paid to Employee)
Salary A/c ....................Dr.
To Salary Payable A/c
(Being Salary Due For the Month)
[Pass the Entry with full ammount of salary due for the month before adjustment of Advance]
Salary Payable A/c...........Dr.
To Salary Advance
To Bank/Cash
(Being Salary Paid after adjustment of Advance)
[Credit Actual paid in Bank/Cash A/c... and amount deducted for advance should be credited to Advance A/c
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