Govt. Grant

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

02 October 2010 Dear all , i have rec. a grant of 100000 Rs. for a machine. machines total cost is 120000 Rs. subsidy is to be received in 4 installment @25000Rs. each. plz. suggest me accounting entries for all transactions.

CA Kishore Tallam

CA Kishore Tallam (Expert)
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05 October 2010 Fixed asset can be accounted net of grant amount once it is established that grant will be received. Since it is receivable in installments, create an asset for Grant receivable and show in Loans and Advances.
Fixed Assets A/c Dr 120,000
To Liability A/c 120,000
Grant receivable A/c Dr 75,000
Bank A/c Dr 25,000
To Fixed Assets A/c 100,000