Banking
Export LC — Negotiation / Discounting
The bank pays the exporter immediately against conforming documents, before receiving payment from the issuing bank.
| Account Name | Type | Debit ($) | Credit ($) |
|---|---|---|---|
| LC Negotiation Asset (Export Finance) | Asset (+) | 195,000.00 | - |
| Cash / Exporter Account | Asset/Liability (-) | - | 195,000.00 |
| Deferred Discount Income (LC Negotiation) | Liability (+) | - | 5,000.00 |
💡 Accountant's Note
LC negotiation provides exporters with immediate liquidity. The bank pays net of a discount and collects the full LC value from the issuing bank at maturity. The discount is income earned over the negotiation period using EIR.
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