Journal Entry for Contractor payment

can you advise the journal entries for part payment for the contractor bill? Suppose Bill's net value is Rs. 100, GST is 12% and TDS is 2 %. But right now I am able to pay Rs. 40 (Net value) + Taxes. Can you suggest the journal entry for making this part payment (Rs. 40) to contractor along with taxes. And what will be journal entry for the remaining amount (Net Rs. 60/-)

Replies (5)
Quick Summary
This discussion explains how to handle journal entries for part payments to contractors. It covers the initial recording of the expense and payables, and then details the specific entries for making a partial payment, including GST and TDS. The remaining balance is left in the payables ledger. It also touches on initial recognition of payables and how to book subcontractor expenses in Tally.

Initially 

Contractor expenses 100

To Payables 100

Later on during payment time

Bills payable 40

GST 12

TDS 2

To Bank 54

To represent the 60₹, there is no entry. The remaining balance will be shown in the payables general ledger.

Remember the journal entry’s first law: record transactions when an event occurs in the day book. Then, transfer them to ledgers. From ledger balances prepare a trial balance and final accounts,

Initially 

Contractor expenses 100

To Payables 100

Later on during payment time

Bills payable 40

GST 12

TDS 2

To Bank 54

To represent the 60₹, there is no entry. The remaining balance will be shown in the payables general ledger. Remember the journal entry’s first law: record transactions when an event occurs in the day book. Then, transfer them to ledgers. From ledger balances prepare a trial balance and final accounts. 

Bad connection, and could not input properly. Hope you got the right answer.

Good morning! Initial recognition of payables can include gst amounts as per company policy or else you can directly pay them if your sure if it is paid back before the end of accounting period. I forgot to mention that yesterday. 

Initial entry will be:--
Expense a/c. Dr. 100
GST a/c Dr. 12. (input tax receivable)
To Contractor's a/c. 110 (98 + 12)
To TDS payable. 2. (100 * 2%)


And on payment of ₹40
Contractor's A/c. Dr. 44.8 ( 40+ 12% gst)
To C/B. 44.8

GOOD MORNING ALL , I HAVE A QUERY , HOW TO BOOK SUB CONTRACTOR EXPENSE IN TALLY (BECAUSE CONTRACT WITH SUB CONTRACTOR IS PHASE WISE WORK FINISH PAYMENT WILL RELEASE , SO HOW TO BOOK THAT ENTRY , UNDER WHICH ACCOUNTING HEAD THE EXPENSE , CAN YOU REPLY ME.

PAYMENT ENTRY I BOOKED IN TALLY : SUB CONTRACTOR A/C DR.

                                                                    TO BANK / CASH A/C

BUT HOW TO BOOKED EXPENSE IN TALLY

 

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