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Creditors amounting to ₹ 80,000 are transferred to Realisation Account. What entry will be made on their payment if ₹ 10,000 of the creditors are not to be paid - Accounts

Question

Creditors amounting to ₹ 80,000 are transferred to Realisation Account. What entry will be made on their payment if ₹ 10,000 of the creditors are not to be paid and the remaining creditors agreed to accept 20% less amount?

Journal Entry

Solution

Date	Particulars	L.F.	Dr. (₹)	Cr. (₹)
	Realisation A/c ...Dr.		56,000	-
	To Cash/Bank A/c		-	56,000
	(Being payment of creditors made in cash amounting to ₹ 56,000, after deducting 20% agreed discount.)