Insurance of Car

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

31 December 2010 Please Suggest me the journal entry:
a car purchase of Rs. 200000 and car insurance 15000 on 30 sep. 2010. what is journal entry

Zeeshan

Zeeshan (Expert)
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31 December 2010 Initial costs at the time of acquisition of FA, should be capitalised e.g. insurance, registeration, accessories etc.
The entry would be:

Vehicle Account Dr. 215000/-
To Car Dealer A/c 215000/-
(if Car dealer is doing insurance)

if you are paying insurance separately to insurer then pass two entry:
1. Vehilce A/c Dr. 2 L
to Car Dealer A/c 2 L
2. Vehicle A/c Dr. 0.15 L
to Bank A/c 0.15 L