Insurance Owing Journal Entry
Company a paid 10 000 as insurance premium in the month of december the insurance premium belongs to the following calendar year hence it doesn t become due until january of the next year.
Insurance owing journal entry. Credit wages payable or credit accrued wages payable. The adjusting entry on january 31 would result in an expense of 10 000 rent expense and a decrease in assets of 10 000 prepaid rent. The 13 420 of wages expense is the total of the wages used by the company through december 31. The adjusting journal entry for wages payable is.
See the journal entry for point 4 in the main example at the top of this page. Suppose stock of inr 10000 is destroyed by fire or any abnormal loss the first case where you receive the total of the claim. The 1 500 balance in wages payable is the true amount not yet paid to employees for their work through december 31. Prepaid insurance journal entries.
The entry here would be an increase in prepaid insurance and an increase in accounts payable. Refer to the first example of prepaid rent. Let s say xyz company who needs to pay its employee liability insurance for the whole of a fiscal year ending 31 december 2018 amounted 10 000. As for your understanding i am referring this through a basic example.
The wages payable amount will be carried forward to the next accounting year. An asset of mr. Insurance a c dr 10 000 to stock a c 10 000 be. Wages expense is an income statement account.
Anonymous if salaries for the month of december is 200000 but paid only 100000 at 31st december and the rest of the amount is paid in january what will the entry be for both months considering fy ends at the end of december. Under the accrual basis of accounting unpaid wages that have been earned by employees but have not yet been recorded in the accounting records should be entered or recorded through an accrual adjusting entry which will. Double entry bookkeeping in accounting is a system of bookkeeping so named because every entry to an account requires a corresponding and opposite entry to a different account this lesson will cover how to create journal entries from business transactions. The order of the journal entries could be different but they will be similar to this.
9660 purchases during the year rs. The following particulars are ascertained from the book and records. Insurance claim journal entry question. The company has paid 10 000 of an insurance premium for the whole year at the beginning of quarter one.
Journal entries are the way we capture the activity of our business. Example journal entry for prepaid insurance. The adjusting journal entry for a prepaid expense however does affect both a company s income statement and balance sheet. Stock at count as on 31 3 08 rs 18948 stock at cost on 31 3 09 rs.
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