I have received fire insurance claim amount Rs. 1,50,000/- in my OD account which is linked in my bussiness(Partneship firm) and bank account named with 3 persons but this fire insurance claim is from mother business which is seperate as we all 3 are joint in property which is showed in my mother busniess balance sheet.
how can i transfer and under which head pass journal entry show that i can transfer this amount to my mother bank account. she is partner in above firm also.
Got it! Here's how you can handle the journal entries for the fire insurance claim amount received in your partnership firm's OD account but which actually belongs to your mother's separate business (where she is also a partner):
Since the money came into your firm’s OD account, you should first record the receipt:
Journal Entry in Partnership Firm Books:
Since the money belongs to your mother’s business, you should pass it as a liability/payable to her business or partner’s loan account until you transfer the money:
Journal Entry in Partnership Firm Books:
Or simply record it as payable if you already credited the income.
Journal Entry in Partnership Firm Books:
Journal Entry in Mother’s Business Books:
Treat the claim money as income of your mother’s business, not the partnership firm.
Your partnership firm temporarily holds the money on behalf of your mother’s business — so it’s a payable/liability in the firm books.
When transferring, clear the payable and reduce the bank balance accordingly.
Maintain clear documentary evidence of this transaction for audit and legal purposes.
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