Advance in contract entries

 

in one contract of 3 years....we have paid full amount of 300000 in advance on 1 oct 2009 for the period of 3 years starting on same day mean 1 oct 2009. what would be entries for this in acounts on 1 oct and on 31 march 2010. and beginning of year 1 april 2010

Replies (5)

What type of contract is this.  Please elaborate your query so that proper accounting entries can be given.

its maintenance contract

Even it is a Maintenance Contract, any advance given prior to  commencement of Work, TDS at

applicable rate has to be deducted first before debiting the contractor.

 

M Veerabhadrappa

Smilaxlaboratories limited

Jeedimetla,  Hyderabad

than what would be entries for this in accounts

Entry would be as follows:

Contractor account  Dr       xxxxxx (This is for advance paid)

To-  TDS                                                 xxxxxx

To- Bank                                                 xxxxxx

For payment of TDS

TDS  Dr        xxxx

To- Bank                 xxxxx

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