Business Permit Journal Entry
When a business pays for a permit, it is usually recorded as a business expense. This entry helps track the cost of obtaining the permit necessary for the business operations.
Scenario: Payment for Business Permit
Assume a company pays ₹5,000 for a business permit.
Journal Entry for Business Permit
| Particulars | Debit (₹) | Credit (₹) |
|---|---|---|
| Business Permit Expense A/c | 5,000 | |
| To Cash/Bank A/c | 5,000 | |
| (Being payment made for business permit) |
Detailed Example:
Example 1: Payment for Annual Business License
Assume a company pays ₹10,000 for an annual business license.
| Particulars | Debit (₹) | Credit (₹) |
|---|---|---|
| License Expense A/c | 10,000 | |
| To Cash/Bank A/c | 10,000 | |
| (Being payment made for annual business license) |
Example 2: Payment for Health Permit
Assume a restaurant pays ₹3,000 for a health permit.
| Particulars | Debit (₹) | Credit (₹) |
|---|---|---|
| Health Permit Expense A/c | 3,000 | |
| To Cash/Bank A/c | 3,000 | |
| (Being payment made for health permit) |
Example 3: Payment for Construction Permit
Assume a company pays ₹20,000 for a construction permit for building expansion.
| Particulars | Debit (₹) | Credit (₹) |
|---|---|---|
| Construction Permit Expense A/c | 20,000 | |
| To Cash/Bank A/c | 20,000 | |
| (Being payment made for construction permit) |
