Journal Entry for Payment for Expenses

Journal Entry for Payment for Expenses

In this article we would discuss the journal entry for payment of expenses. The expense shall be debit as increase and payment shall be credited. There are two possible ways of paying the expenses i.e. cash payment and bank payment.

Journal Entry for Payment of Expenses- Bank

Journal for bank payment of expenses shall be recorded by debiting the expense and crediting the bank. Expense is debit being increase in expense, while bank is decrease as decrease in asset.

Date	Particular	Ledger Folio	Dr.	Cr.
	Expense		xxx
	Cash			xxx

Journal Entry for Payment of Expenses- Cash

Journal entry for cash payment of expense shall be recorded by debiting the expense and crediting the cash. The expense is debited being increase and cash is credited for a decrease in asset.

Date	Particular	Ledger Folio	Dr.	Cr.
	Expense		xxx
	Cash			xxx

 

Examples of Journal Entries of Payment of Expenses

1.    Payment of Salary in cash 10,000/-

2.    Payment of Repair through cheque 12,000/-

The above transaction shall be recorded by debiting the expense and crediting the cash/bank as shown below;

Date	Particular	Ledger Folio	Dr.	Cr.
	Salary		10,000
	Cash			10,000

Date	Particular	Ledger Folio	Dr.	Cr.
	Repair		12,000
	Cash			12,000

Journal Entry for Payment

Journal Entry for Payment

In this article we would discuss the journal entry for payment in details. We know that payment can be made either by cash or through cheque. Journal entry for payment is recorded by crediting the cash or bank (as case may be). The bank or cash is credited being decrease in asset and other aspect shall be debited.

Journal Entry for Payment of Expenses

Journal entry for payment of expenses is recorded by crediting the bank/cash and debiting the expense. For example salary paid in cash amounting 24,000 shall be recorded as under;

Date	Particular	Ledger Folio	Dr.	Cr.
	Salary		24,000
	Cash			24,000

Journal Entry for Payment of Asset Purchased

Journal entry for payment for purchase of asset shall be recorded by crediting the bank/cash and debiting the asset purchased. For example machinery purchased amounting 28,000 shall be recorded as under;

Date	Particular	Ledger Folio	Dr.	Cr.
	Machinery		28,000
	Cash/Bank			28,000

Journal Entry for Payment to Creditor

Journal entry for payment of creditor shall be recorded by crediting the bank/cash and debiting the creditor (being decrease in liability on payment). For example a creditor Mr.A is paid an amount of 128,000 shall be recorded as under

Date	Particular	Ledger Folio	Dr.	Cr.
	Ali		28,000
	Cash/Bank			28,000

Journal Entry for Payment of Tax

There are two possible situation of payment of tax, one direct payment of tax (there is not tax liability in the books of account). Other is payment of tax liability appearing in the books of account.

Direct payment of Tax

Direct payment of tax is charged as expense and cash is credited.

Date	Particular	Ledger Folio	Dr.	Cr.
	Tax		14,000
	Cash/Bank			14,000

Payment of Tax liability

Tax liability is reduced (tax expense has already been charged, when liability was created). Thus liability is debited and cash is credited.

Date	Particular	Ledger Folio	Dr.	Cr.
	Tax Liability		14,000
	Cash/Bank			14,000

Journal Entry for Payment of Tax

Journal Entry for Payment

In this article we would discuss the journal entry for payment in details. We know that payment can be made either by cash or through cheque. Journal entry for payment is recorded by crediting the cash or bank (as case may be). The bank or cash is credited being decrease in asset and other aspect shall be debited.

 Journal Entry for Payment of Expenses

Journal entry for payment of expenses is recorded by crediting the bank/cash and debiting the expense. For example salary paid in cash amounting 24,000 shall be recorded as under;

Date	Particular	Ledger Folio	Dr.	Cr.
	Salary		24,000
	Cash			24,000

 Journal Entry for Payment of Asset Purchased

Journal entry for payment for purchase of asset shall be recorded by crediting the bank/cash and debiting the asset purchased. For example machinery purchased amounting 28,000 shall be recorded as under;

Date	Particular	Ledger Folio	Dr.	Cr.
	Machinery		28,000
	Cash/Bank			28,000

Journal Entry for Payment to Creditor

Journal entry for payment of creditor shall be recorded by crediting the bank/cash and debiting the creditor (being decrease in liability on payment). For example a creditor Mr.A is paid an amount of 128,000 shall be recorded as under

Date	Particular	Ledger Folio	Dr.	Cr.
	Ali		28,000
	Cash/Bank			28,000

Journal Entry for Payment of Tax

There are two possible situation of payment of tax, one direct payment of tax (there is not tax liability in the books of account). Other is payment of tax liability appearing in the books of account.

Direct payment of Tax

Direct payment of tax is charged as expense and cash is credited.

Date	Particular	Ledger Folio	Dr.	Cr.
	Tax		14,000
	Cash/Bank			14,000

 

Payment of Tax liability

Tax liability is reduced (tax expense has already been charged, when liability was created). Thus liability is debited and cash is credited.

Date	Particular	Ledger Folio	Dr.	Cr.
	Tax Liability		14,000
	Cash/Bank			14,000