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Insurance paid
max life insurance paid is capital or expenditure
Replies (3)
Life Insurance is personal expenses, paid from business will be Debited to Capital A/c of Sole proprietor .
Max Life Insurance A/c Dr
Cash. A/c / Bank Cr
( paid for life insurance from Business)
Capital A/c Dr
To Max Life Insurance Cr
( Transfer entry)
Insurance paid is a revenue expenditure except for other cases where it forms part off cost or capital expenditure.
If Company paid Insurance primium on behalf of employee, then it's revenue expenditure to Company and will be debited to P & L A/c otherwise Life Insurance is personal expenses .
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