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This query is : Resolved

Shivani (Querist)
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06 November 2015 Dear Friends

A sells goods to B for 100000 on 1-4-15. A gives B credit period of 10 days. If B doesnt make payment within 10 days A charges B interest @ 24% per annum.

On 25-4-15 B makes payment of Rs. 80000. He aint paying anything more.

A is loosing out on rest of Rs. 20000 plus interest he would have earned had B made full payment with interest for delayed payment.

what will be entries in books of A and B, full entries from beginning till end.

thanks

shivani

Rajnish Singh

Rajnish Singh (Expert)
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09 November 2015 Hello ,

on 1st april : B debit to sale account with 1 lac.

25.04.15 : cash or bank debit , interest received debit , Bad debt account debit to B.

Bank - 78356
interest - 1644 ( for 25 days)

B - 80000

Rajnish Singh

Rajnish Singh (Expert)
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09 November 2015 and 25.04.15

Bad debt Dr.

To B -21644

Shivani

Shivani (Querist)
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10 November 2015 sir interest is in addition to rs. 80000 and how can u debit interest ?!!! as A were supposed to received interest

please recheck ur entries

Rajnish Singh

Rajnish Singh (Expert)
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10 November 2015 yes you ar right interest received would be credit.

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