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Former Member
Jul 21, 2008 at 01:34 PM

LC Accounting

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Dear all,

I have a following accounting transaction in case of Letter Of credit. Is there any means of handling this in without just passing a plain JE. My client wants to take it thru a bank receipt:

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1) Purchase import dr. 8818320 (amount of commercial import invoice* currency rate as specified by bank)

party cr. 8818320 ( This can be handled by A/P Invoice)

2) Party dr. 8818320

to Bank L/C A/c Cr. 8818320 ( On same day) ( This can be handled by incoming payments window)

How will we handle the under mentioned transaction:

After 90 days bank will pay on company's behalf as per that days exchange rate. Bank will send an advice regarding the same

3) Bank Lc A/c dr. (with amount on commercial bill * exchange rate of that day)

Bank CC a/c Cr. ( with same amount)

bank Commision a/c debit

Service tax receivable a/c dr. (on commision)

Bank Interest a/c debit

Bank Charges Debit

to Bank CC a/c credit

Foreign Rate Difference gain/loss db/credit (as the case may be)

Kindly advice