Accounting Entries for Letter of Credit Payments
When a payment is made with the letter of credit payment method, post accounting entries to the line of credit account. This should only be done when the payment has a post status of U (unposted) and a payment method of LC (letter of credit).
Action: Voucher Entered and Posted
GL Business Unit |
Distribution Account Type |
Foreign Amount |
Foreign Currency |
Monetary Amount |
Currency Code |
---|---|---|---|---|---|
DEU01 |
Expense Distribution |
10000 |
EUR |
10000 |
EUR |
DEU01 |
Accounts Payable |
(10000) |
EUR |
(10000) |
EUR |
Action: Payment Entered and Posted, Discount Not Taken
The system credits the letter of credit account instead of the cash account.
GL Business Unit |
Distribution Account Type |
Foreign Amount |
Foreign Currency |
Monetary Amount |
Currency Code |
---|---|---|---|---|---|
DEU01 |
Accounts Payable |
10000 |
EUR |
10000 |
EUR |
DEU01 |
Letter of Credit |
(10000) |
EUR |
(10000) |
EUR |
Action: Payment Entered and Posted, Discount Taken.
When a discount is taken, the system subtracts the discount amount from the letter of credit amount and posts the difference to the discount earned account.
GL Business Unit |
Distribution Account Type |
Foreign Amount |
Foreign Currency |
Monetary Amount |
Currency Code |
Calculation |
---|---|---|---|---|---|---|
DEU01 |
Accounts Payable |
10000 |
EUR |
10000 |
EUR |
|
DEU01 |
Letter of Credit |
(9800) |
EUR |
(9800) |
EUR |
10000 - (10000 * .02) |
DEU01 |
Discount Earned |
(200) |
EUR |
(200) |
EUR |
10000 * .02 |