Company A gets a loan and bought a Fixed Assets and given the FA to other Company B.
Both are related party and separate legal entity.
What will be accounting treatment in both Company's
Jalpa Joshi
( )
(86 Points)
Replied 27 August 2021
For Company A :
When a loan is taken -
Bank A/c Dr
To Loan Liability Cr
When FA purchased -
FA A/C Dr
To Vendor Cr
When FA has given to Company B -
Company B A/C Dr
To FA Cr
For Company B :
When FA Received -
FA A/C Dr
To Company A Cr
Arjun
(ACCOUNTANT)
(24 Points)
Replied 27 August 2021
Thanking you,
In light of the suggestion following are the followup
the Ownership of the FA is still company A.
Do we need treat as investment in Company B by Company A, or treat it as normal transaction,
because the loan payment will done by company A
satish
(teaching)
(2046 Points)
Replied 27 August 2021
Ok. In that case, you can treat it as - property given on lease basis.