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This query is : Resolved
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
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
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
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
09 November 2015
and 25.04.15
Bad debt Dr.
To B -21644
Bad debt Dr.
To B -21644
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
please recheck ur entries
10 November 2015
yes you ar right interest received would be credit.
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