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Bills receivables a/c
Commission receivables a/c
To H a/c
(Invoice received from H and recorded it as purchases on accrual basis)
Purchases a/c
To Cash a/c
(Paid 100% cash for the above order to S)
Bank a/c
To Bills receivable a/c
To Commission receivables a/c
(When money is received from H to K)
These are the entries in your books.
Your credit note sent to H from S is due to purchase returns. Otherwise, it is always a debit note you will receive from S to all customers.
Refer to bills of exchange journal entries for further clarity because the above entries needs further adjustments in regards to H account after he pays cash. Eg. in the example, K is entitled only to commission and should record his variable pay. However, if we imagine that K is actually reselling the goods to H,
H a/c
To Bills receivables
To Commission receivables a/c
a reconciliation should be done for the above because both of the above receivables are credited and banks should b debited.