Cash credit journal entry

Hi can someone pls help me with journal entry for cash credit account in company book

1. For Interrest charged by bank every month on CC account 

2. Opening balance of Cc account in company books of account 

3  processing fees and cheque book charges by bank on Cc account 

 

thanking you in advance 

 

Replies (3)
Quick Summary
This discussion explains how to create journal entries for a cash credit account in company books. It covers interest charged by the bank monthly, processing fees, and cheque book charges. The correct entries are provided for each scenario, including how to debit interest, fees, and bank charges to the respective accounts and credit the bank. It also touches upon the collateral typically required for a cash credit facility.

Interest on CC A/c Dr
To Bank A/c Cr
( Being Interest charged by the Bank for cash credit )

processing fees A/c Dr
To Bank. A/c Cr
( proceedings fees for CC account )

For cheque book charges you create ledger Bank charges A/c

Bank Charges A/c Dr
To Bank A/c Cr
( cheque book charges paid )

For  Cash Credit  Company has  to give  Stock in Hand  , Trade  Debtors . Trade Creditors  etc to bank  for  Drawing power .Company Can withdraw  as per Drawing power  or sanction Limit  Whichever is lower .

Thanks and is below entry correct to show in book of firm to show opening for cash credit 

 

Icici bank account no 12345 debit 

to 

overdraft account 

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