Journal Entry for Expenditure on Assets (Erection or Installation)

Any expenditure incurred in the erection or installation of any building or machinery or any type of asset is considered to be capital expenditure and debited under the name of the particular asset.

Journal Entry: 

Example 1: Machinery purchased worth ₹50,000 and paid installation charges ₹2,000.

Solution: 

Example 2: Purchased building for ₹5,00,000 and paid ₹25,000 on its registration.

Solution: