Payment to creditor form other plant

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

05 February 2015 Dear Experts,

I would like to ask what journal entry(s) should pass in the case where a company has two plants plant A and Plant B. Now a payment of a creditor of plant A is made by plant B. Please solve the problem.

Vinayak

Vinayak (Expert)
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06 February 2015 If both plants maintain separate accounts then the following entry should be passed:

In the books of Plant A:

Creditor Account Dr
To Plant B Account Cr

In the books of Plant B:
Plant A Account Dr
To Cash or Bank Account Cr