What are the journal entries for post dated cheques issued?

Answer 1

When a post-dated cheque is issued, the company records it as a liability until the date on the cheque. The journal entry to record the issuance of a post-dated cheque involves crediting the bank account (decreasing cash) and debiting a liability account such as "Post-Dated Cheques Payable." On the date the cheque is cashed, the company will reverse the initial entry by debiting "Post-Dated Cheques Payable" and crediting the bank account. This ensures accurate tracking of outstanding liabilities and cash flow.

Answer 2

The journal entries for PDC's issued are the following;

1. Debit the Prepaid Expenses a/c.(Rent,etc)

2. Credit the PDC Payable a/c.

When one PDC becomes due and the chq.encashed;

1. Debit the Expenses a/c.(Rent,etc.)

2. Credit the Prepaid Expenses a/c.

3. Debit the PDC Payable a/c.

4. Credit the the Bank a/c.