Debt settlement

This query is : Resolved

gaurav jain (Querist)
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21 February 2020 We sold goods to our debtor 1. Debtor 1 further sold our goods to our another debtor - debtor 2. Now debtor 1 wants that debtor 2 directly pays his dues of debtor 1 to us. Can he do so what is the procedure?

Akash Monwani

Akash Monwani (Expert)
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22 February 2020 Yes , Debtor 2 can directly pay the amount to you
Following will be accounting treatment . First deposit the amount recieved in account of Debtor 2 the documentary evidence for it will be your bank statement
Secondly transfer the amount via journal entry from debtor 2 to debtor 1 for the purpose of documentary evidence obtain a letter from debtor 2 on his letterhead sealed and signed to transfer the amonut

Akash Monwani

Akash Monwani (Expert)
Follow

22 February 2020 Yes , Debtor 2 can directly pay the amount to you
Following will be accounting treatment . First deposit the amount received in account of Debtor 2 the documentary evidence for it will be your bank statement
Secondly transfer the amount via journal entry from debtor 2 to debtor 1 for the purpose of documentary evidence obtain a letter from debtor 2 on his letterhead sealed and signed to transfer the amount

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