Journal Entry for Loss of Insured Goods/Assets

Sometimes insured goods are lost by fire, theft, or any other reason. There can be three cases related to the loss of insured goods or assets.

A. Claim does not get accepted by the Insurance Company: 

Journal Entry: 

Example:

1. Goods lost by fire ₹50,000. Insurance co. does not accept the claim.
2. Assets lost by fire ₹20,000. Insurance co. does not accept the claim.

Solution:

B. Insurance Company partly accepted the claim: 

Journal Entry: 

Example:

1. Goods lost by fire ₹50,000. Insurance co. accepted the claim worth ₹30,000.
2. Assets lost by fire ₹20,000. Insurance co. accepted the claim worth ₹15,000.

Solution:

C. Insurance Company fully accepted the claim: 

Journal Entry: 

Example:

1. Goods lost by fire ₹50,000. Insurance co. fully accepted the claim.
2. Assets lost by fire ₹20,000. Insurance co. fully accepted the claim.

Solution:

For receiving the claim money:

Journal Entry: 

Example: Amount of claim money ₹50,000 received.

Solution:

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