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i hire a contractor company for repair work. The invoice amount is for 5000$. I pay 3000 on the date of the invoice and 2000 later. How should the accounting entries be.
Is it
Dr Repair expense a/c 5000
Cr Bank a/c 3000
Cr Contractor payable a/c 2000Pls Help.Thanks
If invoice is the document that also confirm performance of works (not only announce sum of payment), your entries looks OK.
Later, when you pay 2000, your entries will be:
Dr Contractor payable a/c 2000
Cr Bank a/c 2000So, in the income statement for that month , will the repair expense be 5000, though we have paid only 3000??
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