Question:
could anyone please help with these two journal entries
first one-A repayment of £367.50 of the bank loan has been made by direct debit.No entries have been made in the accounts.The loan balance is £6750Cr
second one-£48.50 cash discount was deducted from a payment made to alpine products.We have been informed that the discount has been dissallowed.The discount was entered in the discount account and the suppliers account.
Answers:
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Debit the loan account for 367.50
Credit the bank account for 367.50
Credit the discount control account for 48.50
Debit expense account that paid the invoice for 48.50
1st transaction - Dr loan account £367.50, Cr bank £367.50
2nd transaction -
Dr expense account £48.50, this is probably purchases as you have understated this expense due to the discount.
Cr Suppliers account £48.50
3rd transaction - pay the supplier the discount disallowed of £48.50
Dr creditor £48.50
Cr bank £48.50
Is your company VAT registered? If so is the supplier? If yes to both then there will be VAT in the £48.50 so you should revise transaction 2 to be:-
Dr Expense account 41.28
DR VAT control 7.22
Cr Suppliers account 48.50
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