Debit Purchases and Credit Supplier.
In order to credit a customer in the account, a credit note must be issued. After that is done, a journal entry can be made to indicate the credit.
credit to interest receivable
Entry 1 [Debit] Cash xxxx [Credit] Bank xxxx Entry 2 [Debit] Bank xxxx [Credit] Notes payable xxxx
[Debit] Goods purchased [Credit] notes payable / accounts payable
debit accounts payablecredit notes payable
[debit] treasury stock [credit] cash / bank
[Debit] Accounts payable xxxx [Credit] bank account xxxx
Party a/c.... Dr Bank a/c.....Cr If we issue a cheque we would have passed an entry (debit the receiver/firm & credit the bank) that entry should be reversed (debit bank & credit the firm).
When a company issues a promissory note, the accountant records the entry by debiting Notes Receivable for the amount of the note and crediting either Cash or another appropriate account, depending on whether the company is receiving cash or not. The credit to Notes Receivable reflects the company’s expectation of future cash inflows from the borrower. This entry establishes the company's right to receive payment under the terms of the promissory note.
[Debit] Accrued interest income [Credit] Notes payable
Journal entry for booking a sale:Accounts Receivable/Party [Debit] $value$Sales [Credit] $value$Tax on sales (GST. excise, etc.) [Credit] $value$Primarily, it is a reversal of the entry passed at the time of booking the sale:Sales [Debit] $value$Tax on sales [Debit] $value$(GST. excise, etc.)Accounts Receivable/Party [Credit] $value$
Functions of credit note