double entry

The bank record is correct and therefore a suspense account credit was created to deal with the temporary imbalance until error could be found. Finding the error leads to debiting suspense account to close it off and crediting repairs. Insurance is not credited as the payment is related to a specific claim and not some reduction of the insurance expense. Hope this helps.

Another way of looking at it is: Assume that Daljit had had the van repaired before the insurance claim was settled and before the insurance money money was received. Assume, for simplicity that the repair costs paid by Daljit were $950. The entry to record that could be: Dr Repairs $950, Cr Cash 950. If the insurance company turned down the claim then that would be the end of it: a repair expense of $950. Now $950 is received from the insurance company and is correctly debited to cash, but no credit entry was made. The TB would show excess Drs of $950, so to make it balance a suspense account of $950 Cr is created. To correct the error the suspense account would be debited $950 and the Repair expense would be credited $950, effectively cancelling the earlier Dr in it. If you receive insurance money in full you haven't incurred an expense as you have been fully compensated.