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Cash credit journal entry

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sayad

Executive

188 Points Posted on 10 February 2022

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.

prasad Nilugal

GST Practitioner & Accounts

8998 Points Posted on 10 February 2022

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 )

prasad Nilugal

GST Practitioner & Accounts

8998 Points Posted on 10 February 2022

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 .