Insurance claim paid out

[mango]

Morning all,

Our business have 3 bakkies which we have instalment sales on. The one bakkie got damaged so we had to do some repair work (panelbeating and spraypainting).

The Insurance just paid out R 18 000.00 into our account.

My question is how do I deal with this transaction? and is there any VAT implications on this amount received etc?

Thank you

[Andromeda]

Hi Mango, you can either credit the repairs expense account or you credit "proceeds from insurance claim". The amount should be inclusive of VAT so account for it.