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How to pass entry of rental income received from machinery, is it direct income

15 March 2022

How to pass entry for the income received fby providing the machines to the customers in rent, here ownership is not transferred only possession is transferred

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3 Replies

prasad Nilugal ( GST Practitioner & Accounts ) (14803 Points)
Replied 15 March 2022

If it is renting business then , same will be direct income other wise indirect Income , so
pass entry .

Trade Debtor's A/c Dr
To Rent of Machine A/c Cr
To CGST A/c Cr
To SGST A/c Cr
( Being rent receivable of Machine )

when you received payment pass entry

Bank A/c Dr
To Trade Debtor's A/c Cr
( Being rent received )

If you.are registered under GST , GST applicable , when you issue Invoice for rent .

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csprasad22 C.S (2 Points)
Replied 19 March 2022

What about TDS receivable missed here

CA Puja Sharma (Chartered Accountant) (5010 Points)
Replied 19 March 2022

Pass the following journal entries:

XYZ A/c Dr.(Asset)
To Rent from Machinery A/c Cr.(Direct Income)
To CGST/SGST/IGST A/c Cr. (Liabilities)

Bank A/c Dr.
TDS Receivable A/c Dr. (Asset)
To XYZ A/c Cr.