Fixed Asset -Entry

Dear all,

               We purchase a machinery from M/s. Sri Ganesh Equipments. In that Bill

Machinery Value      25000

Less: Discount 10% 2500

Sub Total                     22500

Add: Vat 13.5%             3038

Grand Total                 25538

Accounting Entry-Method

1) Machinery A/c    Dr. 25000                                2) Machinery A/c Dr.  22500

    VAT 13.5%           Dr.     3038                                    Vat 13.5%        Dr.    3038

    Discount Received           Cr. 2500                          Sri Ganesh Equipment Cr.   25538

    Sri Ganesh Equipment    Cr 25538

In the Above methods Which one is the Correct Method to pass the Entry

 

Replies (2)

Cost of fixed asset includes all costs incurred on procurement of that asset and excludes deductable tax amount and discount.

In view of the above method 2 is correct.

sECOND eNTRY is Right... ad TRADE DISCOUNTS are ignored while passing JE

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