05-02-2007, 01:59 PM
AOA Mr. Kamran,
This is with reference to your first solution. You have directed that we can capitalize the asset at fair value by crediting deferred credit account. Please let me know about the nature of deferred credit account.
1. Whether deferred credit is our liability?
Please also explain that how I can amortize this deferred credit account at the end of each year? Should I make two separate entries for this purpose? One for depreciation expense by crediting accumulated depreciation and another for amortization by crediting our income?
I shall be thankful for your response.
Thanking You
Zia ur Rahman.
This is with reference to your first solution. You have directed that we can capitalize the asset at fair value by crediting deferred credit account. Please let me know about the nature of deferred credit account.
1. Whether deferred credit is our liability?
Please also explain that how I can amortize this deferred credit account at the end of each year? Should I make two separate entries for this purpose? One for depreciation expense by crediting accumulated depreciation and another for amortization by crediting our income?
I shall be thankful for your response.
Thanking You
Zia ur Rahman.
