Journal entry

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swapnil sonvane (Querist)
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23 February 2013 "B" taken office on rent from "c"& after "B" sublets to its subsidary co. "A" on same amt of rent , so "A" is directly paid rent to "c" so tell me the Jouranl Entry in the books of "A" & B"with statutory requirments.

CA. Sunil Kumar

CA. Sunil Kumar (Expert)
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23 February 2013 There is no need for any entry in the books of "B". although as "B" actually taken office on Rent hence there is a contingent liability on "B" if "A" does not pay rent to "C".

Hence Contingent liability will appears in "B". book.

Journal Entries in the books of "A"

Rent Exp A/c Dr.

To Party A/c "C"

Party A/c "C" Dr.

To Bank A/c
To TDS (if applicable)

swapnil sonvane

swapnil sonvane (Querist)
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23 February 2013 ok sir thnks...

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swapnil sonvane

swapnil sonvane (Querist)
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23 February 2013 but sir in which head "A" booked C" in his accounts bcz the "A" taken on rent from "B" so agreements is between "B & A". If we paid rent to c how the C account get seteled in books of "A"?

CA. Sunil Kumar

CA. Sunil Kumar (Expert)
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23 February 2013 Its a triplicate agreement.

and actually rent is paid by "A" to "C".

there is no problem if a directly booked and paid to "C".

There my be another way like

In books of B

Rent Exp Dr
To "C"

"A" Dr
To Rent Exp

"C" Dr
To "A"

In books of A

Rent Exp Dr
To "B"

"B" Dr
To "C"

"C" Dr
To Bank

ultimate effect in books of "B" NIL

in books of "A" Rent booked and Liability booked for "C"

swapnil sonvane

swapnil sonvane (Querist)
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23 February 2013 Thanks sir now i get cleared..