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Accounting entry

sushant gurav (Accountant) (396 Points)

13 July 2013

sir,

our company brought a new vehicle. the invoice value is 9,53,000.00

An amount of Rs. 400,000.00 is assumed paid including VAT towards exchange of old vehicle which is under the same company.

An amount of Rs 553,000.00 is taken as loan from bank.

AN AMOUNT OF ROUGHLY 9500.00 IS PAID AS REGISTRATION FEE TO TRANSPORT DEPARTMENT BY CAR COMPANY NOT INCLUDED IN INVOICE .

AND AMOUNT OF RS. 30000.00 IS PAID AS INSURANCE NOT INCLUDED IN INVOICE.

HOW TO RECORD THESE ENTRIES IN THE BOOK.

KINDLY SUGGEST

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4 Replies

vikas (student ) (139 Points)
Replied 13 July 2013

journal entry

1. new vehicle Dr 953000

To Seller a/c 953000

2. seller a/c Dr 953000

To old Vehicle 400000

To Bank loan 553000

3. New vehicle Dr 39500*

To registration charges 9500

To insurance 30000

* this amount is also capitalised becoz expenses incurred upto the date installation

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Prakash Jha (Executice Accounts) (36 Points)
Replied 25 July 2013

Sushant Gurav

Your company is supposed to book only that part which has been paid or invoiced by you. Please note that if the dealer has not mentioned the expenses of Insurance and Registration then you are too not suppose to book those expenses in your books.

At the time of taking Delivery

New Vehicle A/c Dr.

To Dealer A/c

At the time of discharging the payment

Dealer A/c Dr.

To Old A/c

To Bank Loan A/c

Do not book anything which has not been charged to you by the dealer.

Rajesh (Service ) (7576 Points)
Replied 27 July 2013

Originally posted by : sushant gurav
	sir, our company brought a new vehicle. the invoice value is 9,53,000.00 An amount of Rs. 400,000.00 is assumed paid including VAT towards exchange of old vehicle which is under the same company. An amount of Rs 553,000.00 is taken as loan from bank. AN AMOUNT OF ROUGHLY 9500.00 IS PAID AS REGISTRATION FEE TO TRANSPORT DEPARTMENT BY CAR COMPANY NOT INCLUDED IN INVOICE . AND AMOUNT OF RS. 30000.00 IS PAID AS INSURANCE NOT INCLUDED IN INVOICE. HOW TO RECORD THESE ENTRIES IN THE BOOK. KINDLY SUGGEST

First you have to write off value of the old vehicle in your book. For this you have to pass the sell entry for old vehicle which should be the exchange value of old vehicle.

Loss on fixed assets A/c Dr (Cr in case of Profit on old vehicle)

Depreciation Reserve A/c Dr. (if dep reserve Account maintained in books

New Vehicle (under fixed assets) A/c Dr. (from the exchange value)

To Old Vehicle account (WDV or actual amount according to books)

For New Vehicle purchase:

New Vehicle A/c Dr. 553000 (Under Fixed Assets)

To Bank Loan Account 553000 (under Libility Account)

For payment of Insurance or Road Tax

New Vehicle A/c Dr

To Bank A/c

Hope all will clear to you

rajesh