Dear All,
Pleas help for this,
Storage license fees paid To BMC Rs.8000/- for period 01-01-2015-31-12-2015,
whichh entry pass?? hos it is effected in our P & L and B/S.
Thanks
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Prepaid exp
Replies (5)
itshould accounted as 1-1-2015 to 31-3-2015 account rs2000 and then fiancial yr 1-4-2015 to 31-12-2015 10000
will u clerify the entry ???
Storage Liscense Fees (under Indirect Expenses) Dr. Rs. 2000
Cr Bank/Cash Rs. 2000
Prepaid Expenses (under Current Assets) Dr. 6000
Cr. Bank/Cash Rs. 6000
Impact on account of above transaction, Bank decreases by Rs. 8000, Prepaid expenses in asset side Rs. 6000 as on 31/3/2015. and Rs. 2000 charged to expenses.
Please note in the subsequent year, that is on 1.4.2015, pass the entry
Storage Liscense Fees Dr. Rs. 6000
Cr Prepaid expenses Rs. 6000
This entry is to recognise the portion of expense for FY 2015-16.
Enty Shuld not book directly for Payment. First it should book for Payable then payment.
The query asked by the concerned person states that the amount is paid to BMC , hence I put forth the above entries. The amount is already paid in advance for the subsequent financial year also.
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