Question

Journal entry for goods valuing ₹15000 insured for ₹10000 @ 5% as premium paid.

Answer 1

Explanation:

Insurance a/c Dr 10000

Premium a/c Dr. 500

to Cash a/c 10500

((Being cash paid for insurance premium))

Answer 2

Following is the journal entry for this transaction:-

In the journal of a business, we record all the transactions that take place in the business daily. When a company maintains a proper stock of its goods, the goods are placed at risk. The stock may catch fire or they may suffer damage or loss in transit. To cover the unexpected loss arising from the damage to the goods, the business owners may insure their goods. They can receive a claim from the insurance company if their conditions are fulfilled. The entry for the question is:-

Insurance a/c  dr.  10,000

Premium a/c  dr.  500

                             to cash a/c  10,500

( being goods valuing ₹15,000 insured for ₹10,000 at a premium of 5%. )