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What will be the accounting entry for10% retention amount payable after12 months of completion of contract upon satisfactory performance of goods assuming the contract completed on01.04.2014. The10% receivable after12 months form01.04.2014.
I didnot get your question properly, sorry for that but the normal transaction related to retentions are:
1- at the time of receiving the subcontractor payment certificate, assuming it is1 and only bill (Final Valuation)
Dr Subcontractor Fee (Expense)200
Cr Retention Payable (Long Term liability)20
Cr Subcontractor Payable (Current Liabilitiy)180
No accounting entry as on, as the payable is in the nature of contingency, payable arises, subject to. For MIS purpose, a provision to that extent may be created, if required.
