letter of credit

The LC opener have an bank limit for open a LC and when the LC got matured the bank Pay the Bill amount (if any bill raised against this LC) and debited charges to your CC A/c.

LC opener doesn't required to make any entry in books, only charges debited by bank for  LC Opening (Like Commission etc) can be debited to Bank Charges A/c in Books. Any way if you wants to control the LC limit then Make debit the LC Amount (FC x Exchange Rate) to your LC account and credit to LC Control account, when LC matured or paid make reverse of the entry

>> Rajesh

Show in notes as a contingent liability.