Give the journal entry for the sinking fund deprecation method.

                    Journal entry

Date Particulars Dr Cr
XX/XX/XXXX Depreciation A/c
To sinking fund A/c
(Being depreciation is transferred to sinking fund account)
 XXX XXX
XX/XX/XXXX Profit and Loss A/c
To Depreciation A/c
(Being depreciation is charged to profit and loss account)
 XXX XXX
XX/XX/XXXX Sinking fund investment A/c
To Bank A/c
(Being amount of depreciation invested)
 XXX XXX
XX/XX/XXXX Bank A/c
To interest on sinking fund investment A/c
(Being interest earned on sinking fund investment)
 XXX XXX
XX/XX/XXXX Bank A/c
To sinking fund investment A/c
(Being sinking fund investment sold at the end of asset life)
 XXX XXX
XX/XX/XXXX Sinking fund investment A/c
To sinking fund A/c
(Being profit on sale of investment transferred to sinking fund)
 XXX XXX
XX/XX/XXXX Sinking fund A/c
To sinking fund investment A/c
(Being loss on sale of investment transferred to sinking fund)
 XXX XXX
XX/XX/XXXX Sinking fund A/c
To sinking fund investment A/c
(Being loss on sale of investment transferred to sinking fund)
 XXX XXX
XX/XX/XXXX Sinking fund A/c
To asset A/c
(Being the book value of asset transferred to the sinking fund)
 XXX XXX
XX/XX/XXXX Sinking fund A/c
To General Reserve A/c
(Being surplus in sinking fund transferred to the General reserve)
 XXX XXX
XX/XX/XXXX Profit and loss A/c
To sinking fund A/c
(Being deficit in sinking fund transferred to profit and loss A/c)
 XXX XXX
Updated on: 2020-09-26T13:51:30+05:30

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