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Journal Entry for Contractor payment


Swarnava Ghosh (Accountant)     23 September 2020

Swarnava Ghosh
Accountant 
 21 points

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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/-)

yasaswi gomes

yasaswi gomes (My grammar is 💯 good I)     23 September 2020

yasaswi gomes
My grammar is 💯 good I 
 154 likes  2662 points

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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,

yasaswi gomes

yasaswi gomes (My grammar is 💯 good I)     23 September 2020

yasaswi gomes
My grammar is 💯 good I 
 154 likes  2662 points

View Profile | My Other Post

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.

yasaswi gomes

yasaswi gomes (My grammar is 💯 good I)     24 September 2020

yasaswi gomes
My grammar is 💯 good I 
 154 likes  2662 points

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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. 

Rohit Patel

Rohit Patel   30 September 2020

Rohit Patel

 15 points

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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


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