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Car owned by company given to employee

A/c entries 4192 views 1 replies

RAMESH BHAT

Jr.Officer Finance & Accounts

29 Points Joined May 2009

I need help

Car is owned by company and the car is given to one employee as part of salary.
Through payroll amount equivalent to EMI is recovered over 5 years including interest. So the car is purchased through dealer is entered and transfered to Fixed asset and will treated as asset in the company books and depreciation will be calculated accordingly.

I would like to track the same car and emi amount so that at any given point of time i want to check balance from each employees.

Please help me with the accounting entry.

Thanks in advance

Replies (1)

Prakash Jha

Executice Accounts

36 Points Joined November 2012

Ramesh Bhat

As you have mentioned that car is purchased by your company and it has been given to employee for their use. Further you have mentioned that your company is recovering amount of EMI (which is payable by your company to the financee company) from the employee as deduction in salary.

As you have booked the car in the books and charging depreciation on it, I would like to give suggetion to follow the following entries whie the transaction takes place in next month: -

At the time of Installment payment

Car Loan A/c Dr.

Interest A/c Dr.

To Bank A/c

At the time of due of salary

Salary A/c Dr.

To Salary Payable A/c

To Interest A/c

To Car to Employee A/c

At the time of transfer of Car: -

Car to Employee A/c Dr.

To Car A/c