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Confusing journal entries

25 June 2023

Hello Everyone Good Morning.

An invoice was received from hdfc ergo for Mediclam insurance of employees for rs. 240000 and policy period is 1st February 2022 to 31st January 2023.
Pass the necessary accounting entries in financial year 2022-2023.

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9 Replies

sabyasachi mukherjee (27579 Points)
Replied 25 June 2023

Let me give you the concept
1. insurance account nominal
2. Cash /bank account credit

1 Like

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kiran (accountant) (444 Points)
Replied 25 June 2023

If you have received an invoice in the month of Feb 22

insurence expenses A/C DR 20000
Prepaid insurance A/C DR 220000
To HDFC Ergo CR 240000

then you monthly prepaid insurance amount transfer to insurance Expenses account

2 Like

RAJA P M ("Do the Right Thing...!!!") (128091 Points)
Replied 25 June 2023

Yes, I agreed with Mr Kiran.

@ Mr Kausik,

pass the entries as per Mr Kiran.

prasad Nilugal ( GST Practitioner & Accounts ) (14803 Points)
Replied 25 June 2023

Yasaswi Gomes new (Finance ) (4514 Points)
Replied 25 June 2023

Well the insurance is capitalised and premiums are expensed. I have to update on insurance standard in Indas.

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Gagan Kaushik (96 Points)
Replied 25 June 2023

Mr Kiran kya aap mujhe bata skte hai ki kon kis head mein aayega tally me aur mujhe yeh bhi explain kr dijiye ki agar Feb mein yah entry hogi toh March and April mein kya entries hogi and so on

kiran (accountant) (444 Points)
Replied 25 June 2023

1 insurence expenses under head indirect expenses 2 Prepaid insurance under Head
current Assets

March 22 To Jan 23 you have to pass under Entry Monthly Basis

insurence expenses A/C DR 20000
To. Prepaid insurance A/C CR 20000