|Earlier article on discount allowed and discount received refers.
Accounting Double Entry for
Debit : Discount Allowed Account
Credit: Debtor’s Account
Subsequently, discount allowed will be credited and charged to the Profit & Loss Account/Income statement.
Debit: Creditor’s Account
Credit: Discount Received Account
Subsequently, discount received will be debited and the Profit & loss account/Income statement is credited.
ABC’s books show the following transactions relating to discounts:
Jan 1 Received from Mr. D $20,000 discount allowed by ABC $200
Jan 5 Paid Mr E $30,000, discount received from Mr E $300
ABC closed its book on a monthly basis.
Ledgers as follow:
DEBTOR- Mr D
DISCOUNT ALLOWED ACCOUNT
CREDITOR- Mr E
DISCOUNT RECEIVED ACCOUNT
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