Transfer of balance - Transfer Creditor A's outstanding to Creditor B

Question: Creditor A's outstanding amount (the amount owing to A) is to be paid to Creditor B ..... that means to transfer the debt of A to B.... how to do that?

Answer:

(1) create a G/L account .... i.e. Transfer Account (account type: Expenses).... this is to serve as temporary account.

(2) create new A/P Credit Note Entry for Creditor A ... to record the amount to be transferred. Knock off. Post the entry to Transfer Account. (you may key in Description as: 'Transfer to B' )

(3) create new A/P Debit Note Entry for Creditor B .... to record the transferred amount ....post the entry to Transfer Account. (you may key in Description as: 'Transfer from A' )

** same steps applicable to debtors: when Debtor A's debt is to be paid by Debtor B. .... use A/R Credit Note Entry and A/R Debit Note Entry.

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