bank guarantee
saurav (Tax practicner) (117 Points)
06 July 2017
entry for bank guarantee in the book of account
3 Replies
saurav
(Tax practicner)
(117 Points)
Replied 06 July 2017
Company wanted to apply for a Government Contract with Railway Mininstry
where company would sell goods to Government of Rs 100 lacs
To secure contract,Bank Guarantee of 40.00,000 was required.
Company took this Bank Guarantee from PNB Bank of Rs 4000000 for 3 months
Bank took 2 % Commission p.a. and Asked for 25% Margin money in the form of a FD
Interest earned on FD was 8% p.a
Government Contract completed and money received from government
Bank Guarantee revoked
FD Returned including Interest on FD
Pass Entries in books of company
where company would sell goods to Government of Rs 100 lacs
To secure contract,Bank Guarantee of 40.00,000 was required.
Company took this Bank Guarantee from PNB Bank of Rs 4000000 for 3 months
Bank took 2 % Commission p.a. and Asked for 25% Margin money in the form of a FD
Interest earned on FD was 8% p.a
Government Contract completed and money received from government
Bank Guarantee revoked
FD Returned including Interest on FD
Pass Entries in books of company
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