A company taken a lease for 3 years for Rs.250000/- on 1st Jan 2000 and taken an insurance policy for Rs.250000/- with annual premium Rs.45000/-. Prepare journal entries.

Question

A company taken a lease for 3 years for Rs.250000/- on 1st Jan 2000 and taken an insurance policy for Rs.250000/- with annual premium Rs.45000/-. Prepare journal entries.

Banking & FinanceFinanceFinance Management

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Solution

The solution is as follows −

                    Journal entries

Date	Particulars	Dr	Cr
1-1-2000	Lease account To Bank account (Being purchase of lease)	250000	250000
	Depreciation fund policy account To Bank account (Being the annual premium paid)	45000	45000
31-12-2000	Profit and loss account To depreciation fund account (Being annual depreciation charge)	45000	45000
1-1-2001	Depreciation fund policy account To bank account (Being annual premium paid)	45000	45000
31-12-2001	Profit and loss account To Depreciation fund account	45000	45000
1-1-2002	Depreciation fund policy account To bank account (Being annual premium paid)	45000	45000
31-12-2002	Profit and loss account To Depreciation fund account (Being annual depreciation charged)	45000	45000
	Bank account To Depreciation fund policy A/c (Being policy money realized on maturity)	250000	250000
	Depreciation fund policy account To Depreciation fund account (Being profit transferred to fund)	115000	115000
	Depreciation fund account To old lease account (Being closure of fund account)	250000	250000

Mandalika

Published on 29-Sep-2020 17:10:46

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