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ABHI KUMAR   15 July 2021

Lic premium entry

lic premium every year we pay now entry plz and after maturuty entry plzzz


 12 Replies

Sourav

Sourav (Student)     15 July 2021

Lic premium a/c dr
to Bank a/c

Bank a/c dr
to Lic maturity proceeds a/c
Vasudevan C P

Vasudevan C P   15 July 2021

Yes, you can follow above stated entry in B.O.A
prasad Nilugal

prasad Nilugal   15 July 2021

1) Show LiC premium under Indirect Expense in Profit and Loss Account when you pay .
2) And Show under Indirect Income when you receive after maturity .
Ankita Jain

Ankita Jain (CA in practice)     15 July 2021

LIC premium paid is a personal expenditure. It is passed through capital account.
prasad Nilugal

prasad Nilugal   15 July 2021

Yes , But paid by the company in the benefits of the employee will be Revenue Expenditure and accordingly I answered .
It is not clear in the query , paid by whom .
prasad  Nilugal

prasad Nilugal (Sr . Accountant and GST Practitioner . )     15 July 2021

If  it is paid by  the sole  proprietor  then entry  will  be 

 1)   Capital        A/c      Dr 

       To Lic  Premium     A/c   Cr 

      (  Being personal  premium  paid  )  

2)  After maturuty  receipt  entyr will be 

    Bank                   A/c    Dr 

    To Capital           A/c     Cr 

(  Receipt  of  LIC  maturuty  amount ) 

 

prasad  Nilugal

prasad Nilugal (Sr . Accountant and GST Practitioner . )     15 July 2021

Of course first  entry  in case of  Sole  proprietor wil be 

Lic Premium      A/c    Dr 

To  Bank            A/c    Cr 

( payment  made ) 

Then  transfer to capital  account 

Sourav

Sourav (Student)     17 July 2021

Yes .....
prasad Nilugal

prasad Nilugal   19 July 2021

Mr Sourav
You only said Yes , so above entry correct or not ?.
Sourav

Sourav (Student)     19 July 2021

Yes entry is correct after entry lic amount should be transferred to capital account
prasad Nilugal

prasad Nilugal   19 July 2021

Ok ..........................
Sourav

Sourav (Student)     23 July 2021

Ok....

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