Macinery subsidy entry

Our company has received a subsidy of 611,869 Rs Ruppe for buying embroidery machines, which is reduced from the loan principal, how to do its accounting entry?

Replies (6)
Quick Summary
This discussion addresses the accounting entry for a company that received a subsidy of 611,869 Rs for purchasing embroidery machines. The subsidy was applied to reduce the loan principal directly. The correct accounting entry involves debiting the Loan Account and crediting the Machinery Account by the subsidy amount. Participants also briefly touched upon the timing of subsidy receipt relative to asset purchase and the application process for such schemes.

Loan A/c Dr
To Machine A/c

You mean with this entry the loan principal which will be deducted from the machinery asset, also the principal and also the value of the machinery?

Loan a/c Dr. 

611869

To Macinery A/c Cr.

 

Yes you got it correct.
Can you please tell me from where you applied for subsidy...as I have to apply for my new business registered under name
There are various schemes.

i Purchas eplant and machinery in the financial year 2021-22 and Subsidy received in Financial Year 2023-24, What is the Accounting Treatment ?

 

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