Journal entries

If Party is A.... Outside Party is B...

As per your query Payment made to Mr B as

Dr. Mr. B - XXXX

Cr. Bank - XXXX

It will journal to Mr. A as

Dr. Mr. A - XXXX

Cr. Mr. B - XXXX

Note : As per above query we will post the Entries. But, As per my view it's not good or Advisable...

In the books of company:

1. when a party X paying advance money to Party Y on behalf of company

Party Y A/c          Dr.

      To Party X

2. when company is paying money to party X

   Party X              Dr.

      To Bank     

Lets  say  1)  Company  = A        2)  Outsider = B      3)  Party =C  (  sundry creditors ) 

All  the  entries  in the  books  of  company  A  

1)  1st  J. E  will  be  Advance  to   C  

      Advance  to Mr  C   A/c                 Dr 

      To  MR B                                       Cr 

(  Being  advance paid  by  Mr B  to  party  on behalf  of  our Company ) 

2)   Same advance paid by  B  return to  him so entry  will be 

      MR  B                    A/c                   Dr 

      To Bank                 A/c                   Cr 

(  Being advance paid  by  B  return  to him ) 

3)  When you received  Invoice form party C ( sundry creditors ) 

      Adjustment  entry 

     Mr  C                                   A/c                 Dr 

     Advance  to  Mr   C          A/c                   Cr 

(  Being  Advance  payment  adjusted  after  receipt  of  Invoice   )