Insurance Premium Refund Journal Entry
An asset of mr.
Insurance premium refund journal entry. Some insurance payments can go on to the profit and loss report and some must go on the balance sheet. Insurance premium a c dr to bank a c. Record the net payroll amount as a decrease to the business checking account or business payroll account if you use a separate bank account for issuing payroll checks. Bank a c personal a c where banker as payer he gives money to the insurance company therefore its credited journal entry.
For example a business buys one year of general liability. Since you are using cash your cash will fall and. Insurance expense p l xxx cr. 9660 purchases during the year rs.
Insurance premium a c nominal a c its the expense of the company therefore its debited. The following particulars are ascertained from the book and records. Insurance premium related to next year transferred to prepaid insurance premium account example journal entry for prepaid salary or wages. If you are paying cash you are again increasing one asset account at the expense of the other because both cash and prepaid insurance are assets.
You need to create a journal entry for the payroll deductions to offset the total cost of the health insurance premium paid. Using the below trial balance and additional information provided along with it. When you pay the remainder of the insurance premium and total a p dr prepaid insurance remaining number of months dr a p total unpaid insurance to date. Hi kevin if the refund is for an over payment of the premium i would post to the expense account to reflect the true cost of premiums paid.
Bank for payments to an insurance company for business insurance. Stock at count as on 31 3 08 rs 18948 stock at cost on 31 3 09 rs. Thus the amount charged to expense in an accounting period is only the amount of the prepaid insurance asset ratably assigned to that period. Prepaid salaries 25 000.
The journal entry would increase supplies and decrease cash. Prepaid wages 10 000. Insurance claim journal entry question. Journalize the prepaid items in the books of unreal corp.
A basic insurance journal entry is debit. Recording journal entries for insurance premiums are also similar. If the refund is from an insurance claim then i would do as you suggested with the sales receipt. X s was destroyed by fire on 1 08 09.
When the asset is charged to expense the journal entry is to debit the insurance expense account and credit the prepaid insurance account. For example journal entry 1 je 1 on left for a 1 000 return premium with a 10 percent sales commission currently creates three accounting records this journal entry shapes balance sheet bl.
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