Posting the Usage of a Bill of Exchange Receivable
Assume you transfer the bill of exchange receivable to your bank for discounting. The bill amount is credited to your bank account and shown on your bank statement. Given a maturity period of 90 days and a discount rate of 7 %, the bank charges a discount of USD 199.50. The bank also levies charges of USD 5.00 on you, which it adds to the discount charge, making a total of USD 204.50.
The following entries arise from this example:
Reversing the Bill Liability
After the bill of exchange becomes due on September 13th and the country-specific bill protest period has elapsed, the bill of exchange can no longer be protested and you are released from your potential liability. You can now clear the potential bill liability from your bank clearing account and the bill receivable from the customer account. When you reverse the potential bill liability, the system automatically posts to the special G/L account "Bills of exchange receivable" and clears the bill receivable there.
The following entries arise from this example:
See also:
Posting Bill of Exchange Usage: Requirements