My company has opened a foreign LC payable at sight after 6 months bank has demande margin money and same has been provide by us to bank now what accounting entries should be passed by us.
3 Replies
valji
(Accounts manager-MBA)
(2150 Points)
Replied 06 May 2011
MARGIN MONEY ON LC -DEBIT TO BANK
MARGIN MONEY CREATE UNDER HAED -LOAN & ADVANCES (ASSET)
MARGIN MONEY IS JUST LIKE SHORT TERM FIXED DEPOSIT ,WHEN YOU MAKE THE PAYMENT TO TO YOUR IMPOTER THROUGH BANK BANK WILL RELEASED MARGIN MONEY WITH INTEREST AFTER DEDUCTATION OF TDS
basant
(manager finance)
(105 Points)
Replied 11 May 2011
I have a doubt that LC opened at sight, is needed to make payment to the bank immediately and not after specific period i.e. 6 months.
U S Sharma
(glidor@gmail.com)
(21063 Points)
Replied 11 May 2011
no
payment is seeked by bank on presentation of bills at bank counter, bank release the payment by debiting your account.
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