Packing Credit and LC accounting
This query is : Resolved
12 July 2010
Please explain the accounting procedure involved in PC and LC
13 July 2010
The following examples are hypothetical.I am keeping this query open for further opinion.
Accounting for LC
On opening an LC amounting to Rs 1000/-in favour of a 3rd party with the bank :
a) Margin Money Deposit Dr 250
To Bank 250
On Maturity of LC
b) Bank Dr 275
To Margin Money deposit 250
To Interest on Margin Money Deposit 25
c) Sundry Creditor Dr 1000
BAnk Charges/Interest Dr 120
To Bank 1120
Packing Credit
This is a term loan.In my opinion entry will be debit bank account and credit Loan Account.
Accounting for LC
On opening an LC amounting to Rs 1000/-in favour of a 3rd party with the bank :
a) Margin Money Deposit Dr 250
To Bank 250
On Maturity of LC
b) Bank Dr 275
To Margin Money deposit 250
To Interest on Margin Money Deposit 25
c) Sundry Creditor Dr 1000
BAnk Charges/Interest Dr 120
To Bank 1120
Packing Credit
This is a term loan.In my opinion entry will be debit bank account and credit Loan Account.
15 July 2010
Expecting revert from other experts also
31 July 2023
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