DEAR EXPERT,
DURING THE PAST COUPLE OF YEARS LIC PREMIUM PAID BY THE PARTNER HAS SHOWN TO DEBIT SIDE IN HIS PERSONAL BOOKS WHEREAS IN BUSINES BOOKS IT WAS SHOWN AS WITHDRAWLS.
NOW I WANT TO KNOW THAT LIC PREMIUM IS AN INVESTMENT AND IT SHOULD BE SHOWN IN BALANCE SHEET IN PERSONAL BALANCE SHEET.
HOW WHAT WILL THE CORRECT JOURNAL ENTRY NOW OF PAST YEAR LIC PREMIUM MADE TO DEBIT SIDE IN THE PERSONAL BOOKS
REGARDS
J SINGH
Mr J Singh You are correct LIC Premeium paid is an Investment.
If you want to show it in Personal Balance sheet you can Just calculate the total amount of past premium paid and just pass one reversal entry by crediting capital a/c and debiting LIC acount in books. In naration kindly mention that the investment previously debited to capital account are reversed for presentation as investment.
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