Journal Entry for Building Renovation
In this article we would
discuss the journal entry for building renovation. The building renovation
expense shall be treated as revenue expenditure, while the major repair which
would improve the durability of the building shall be capitalized.
Journal
Entry for Building Renovation as Revenue Expense
Normal renovation like
annual paint or small repair shall be charged to repair account. For example
ABC annually paints the whole building for better look and cleanness purposes.
Then this expenditure shall be charged as repair
Date
|
Particular
|
Ledger Folio
|
Dr.
|
Cr.
|
Building
Repair
|
xxx
|
|||
Cash
|
xxx
|
Journal
Entry for Building Renovation as Capital Expense
The major repair which will
either improve the durability or capacity
or utility of building shall be charged as capital expenditure. For example tiles were fixed on the floor to improve the durability of the floor shall be capitalized in the books of account.
Date
|
Particular
|
Ledger Folio
|
Dr.
|
Cr.
|
Building
|
xxx
|
|||
Cash
|
xxx
|
Very useful info. Hope to see more soon!.
ReplyDeletewhen you are starting the construction of a building you must have mandatory tools which i have discussed in my blog read this
ReplyDeleteGreat Post! You've provided some great information and ideas to your readers. Please keep sharing.
Please visit patio bunbury