I am an accountant of a individual having business. My client has taken out 20 different LIC policies for which an annula premium of Rs. 200000 is being paid every year. 1) Can i show the premium paid on the asset side of the balance sheet policy wise thereby strenthning my balance sheet instead of debiting it to Capital Account? 2)Also since i have maintained business books and personal books seperately, where will the effect of such transaction come. Payment is made out of business funds.
17 June 2010
Debit Rs.200000/- in capital account as drawings (in business books) and credit the same in personal books in investment in firm and show amount of premium paid as investment in LIC Policies in assets side (in personal books)
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