Question

ramesh settled his account by issuing cheque including rs 60 for interest pass the journal entry​

Answer 1

Answer:

Creditor A/c Dr.

Interest expense A/c Dr.

To Bank A/c

To Discount (balance, if any)

Explanation:

Settlement of any pending dues means some discount has been received on the total dues pending.

E.g. For dues of like 1.2 lac, you settled it with just 1 lac only. Here 0.2 lac would be the discount.