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    ameyb's Avatar
    ameyb Posts: 1, Reputation: 1
    New Member
    		  
    #1

    May 1, 2017, 05:26 AM
    Journal entry doubt
    Cheque for Rs. 1,000 received from Murgan in settlement of a debt of Rs. 1,250 returned dishonoured
    Journal entry
    Murugan Account Dr. 1250
    To Bank Account 1000
    To Discount Allowed Account 250

    Why this murugan a/c DR. because that cheque returned so our sundry debtor increased. Bank balance decreased so thatswhy we cr. Bank a/c till this whatever I understood is this correct.
    But discount allowed is our loss so why we are putting discount allowed cr side it should be Dr side
    Please explain me
    paraclete's Avatar
    paraclete Posts: 2,706, Reputation: 173
    Ultra Member
    		  
    #2

    May 2, 2017, 07:17 PM
    How confused you are? So you have reinstated the debtor and the bank account balance and reversed the discount. All that remains is to write the debt off as a bad debt which is a debit to expense
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