We have accepted a bills payable of 90 days with 1 % interest on2.5 lacs So how we can journalize the same ?
purchase debit, party name credit
party Dr.
to B/p Cr.
no entry for interest charges now...
Party a/c Dr. 2,50,000
Interest A/c Dr. amount of interest
To Bills Payable Total amount
B/P A/c dr.
to Party a/c
(On accepting the bill)
Party A/c Dr.
to Interest on B/P
(On charging income on B/P)
It should be in my opinion
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