letter of credit

at the time of opening L/C for 1000 bank demand 20% margin and 80% bank guarantee

now entries

at the time of opening of LC 

Margin to LC a/c dr ........200

to Bank A/c ..............................200

TDRa/c dr ( BG)......................80 (10% of 800)

to Bank A/c ....................................80

at the time of receipt of document at bank counter by vendor 

Party A/c dr ...........................1000

To Bank A/c .....................................800

To Margin to L/C A/c .......................200

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Now the LC magin TDR is released and it would be kept for next L/C or get encashed with accured interest.