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An entity had some items of plant and machinery paid for by a related party. I am clear about the Debit entry of the jounal.

However what should the Credit entry be:
*Other income
*New Reserve set up maybe capital contribution?
in IAS 16 - Property, Plant and Equipment by Level 1 Member (1.7k points)

1 Answer

0 votes
According to IAS 24 and IAS 16,

The entry for the purchase of property, plant, and equipment must be as follows:,

Property, Plant, and equipment (Debit)      xxx

Cash/ Account Payable (Credit)                     xxx

There is no effect on the journal entry due to the related party. The transactions with related parties only required disclosures.
by Level 2 Member (3.8k points)