Banking
LC Settlement — Payment to Beneficiary Bank
The bank pays the beneficiary's bank when conforming documents are presented under the LC.
| Account Name | Type | Debit ($) | Credit ($) |
|---|---|---|---|
| LC Commitments (Off-Balance Sheet) | Contingent Liability (-) | 200,000.00 | - |
| Customer Loans (LC Financing) | Asset (+) | 200,000.00 | - |
| Nostro / Correspondent Account | Asset (-) | - | 200,000.00 |
💡 Accountant's Note
When the LC is drawn, the contingent liability becomes an on-balance-sheet loan. The bank pays the beneficiary and the customer now owes the bank. The LC margin is applied to reduce the loan.
Professional Excel Template
Get the automated version of this entry. Includes built-in IFRS checks, VAT calculators, and SAP-ready upload formats.
QA
Expert Analysis by Qusai Ahmad
General Accountant Supervisor & IFRS Specialist
Specialized in SAP GUI automation and Middle Eastern tax compliance. Building digital tools for the next generation of finance leaders.