Letter of Credit Journal Entries (student needs help)

Hi all !

 

I searched google a lot but found mixed journal entries for Letter of Credit in the buyer's (importer's) books.

However, I will reiterate here what I found:

 

(1) When bank issues L/C:

L/C Margin...Dr. ------------------------>(Is this an asset account ??)

Bank Account...Cr

 

(2) When L/C is realised, the bank charges its commission:

L/C Commission/Charges...Dr

Inventory...Dr.

Supplier...Cr.

Bank...Cr.

L/C Margin..Cr.

 

Are the above journal entries correct ? And/or are there more journal entries than these ?

 

I would really appreciate your help in this regard.

 

Thank you

 

 

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johngroganjga |
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Shawn |

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Shawn |

Not just a philosophy

stepurhan |
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stepurhan |
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stepurhan |
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