Question

What journal entry of transaction bank allowed us interest rs.100 .Com?

Answer 1

Bank account Dr.
To Interest income account

Answer 2

Discount allowed by bank is 'Discount Received' for us .

Discount received is a gain for us. According to the nominal account principle, we shall credit all incomes and gains.

Hence, the entry is as follows :

Bank A/C. Dr. Rs.100

To Discount Received A/C. Rs.100

(Being discount allowed by bank)