Credit Card Payment Journal Entry

When a company makes a payment using a credit card, it needs to record the transaction to reflect the expense and the liability to the credit card company.

Scenario: Payment for Office Supplies Using Credit Card

Assume a company purchases office supplies worth ₹15,000 using a credit card.

Journal Entry for Credit Card Payment:

Particulars	Debit (₹)	Credit (₹)
Office Supplies Expense A/c	15,000
To Credit Card Payable A/c		15,000
(Being office supplies purchased using credit card)

Explanation:

1. Office Supplies Expense A/c is debited to record the expense for the office supplies.
2. Credit Card Payable A/c is credited to record the liability to the credit card company.

Payment to Credit Card Company

When the company makes a payment to the credit card company to settle the credit card bill, the liability is reduced.

Scenario: Payment Made to Credit Card Company

Assume the company pays ₹15,000 to the credit card company.

Journal Entry for Payment to Credit Card Company:

Particulars	Debit (₹)	Credit (₹)
Credit Card Payable A/c	15,000
To Cash/Bank A/c		15,000
(Being payment made to credit card company)

Explanation:

1. Credit Card Payable A/c is debited to reduce the liability.
2. Cash/Bank A/c is credited to reflect the cash outflow.

Summary of Entries

1. Credit Card Payment for Office Supplies:

   • Debit Office Supplies Expense A/c
   • Credit Credit Card Payable A/c

2. Payment to Credit Card Company:

   • Debit Credit Card Payable A/c
   • Credit Cash/Bank A/c

Detailed Example

Scenario: Credit Card Payment for Multiple Expenses

Assume a company uses a credit card to pay for the following expenses:

• Office Supplies: ₹10,000
• Travel Expenses: ₹5,000
• Meals and Entertainment: ₹3,000

Total Credit Card Bill: ₹18,000

Journal Entry for Credit Card Payment:

Particulars	Debit (₹)	Credit (₹)
Office Supplies Expense A/c	10,000
Travel Expenses A/c	5,000
Meals and Entertainment Expense A/c	3,000
To Credit Card Payable A/c		18,000
(Being various expenses paid using credit card)

Journal Entry for Payment to Credit Card Company:

Particulars	Debit (₹)	Credit (₹)
Credit Card Payable A/c	18,000
To Cash/Bank A/c		18,000
(Being payment made to credit card company)

Explanation:

1. Office Supplies Expense A/c, Travel Expenses A/c, Meals and Entertainment Expense A/c are debited to record the respective expenses.
2. Credit Card Payable A/c is credited to record the liability to the credit card company.
3. Credit Card Payable A/c is debited when making the payment to the credit card company.
4. Cash/Bank A/c is credited to reflect the cash outflow.