Inter Company trnafer

ABC company paid transfer money to WRC Company on behalf of CBD Company what is the entry in two company

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Quick Summary
This discussion clarifies the accounting entries for an inter-company transfer where ABC Company paid WRC Company on behalf of CBD Company. ABC Company would record a debit to CBD Company (as a receivable) and a credit to Bank/Cash. WRC Company would record a debit to Bank/Cash and a credit to ABC Company (as a payable). These entries assume ABC is acting as an intermediary, and specific agreements may alter the accounting treatment.

Here are the journal entries for the two companies:

*ABC Company (paying on behalf of CBD Company)*

Debit: CBD Company (as a receivable or advance) Credit: Bank/Cash (the amount paid to WRC Company)

Example: Debit: CBD Company ( Advance) $XXXX Credit: Bank $XXXX *

WRC Company (receiving the payment)* Debit: Bank/Cash (the amount received from ABC Company) Credit: ABC Company (as a payable or trade payable)

Example: Debit: Bank $XXXX Credit: ABC Company (Trade Payable) $XXXX Note:

The entries assume that ABC Company is acting as an agent or intermediary on behalf of CBD Company. 

If there are any specific agreements or arrangements between the companies, the entries may vary. 

Additionally, the entries may need to be adjusted based on the nature of the transaction and the accounting policies of the companies involved. 

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