Emin Radwan In: Category - Journal EntriesWhat is the journal entry for payment to vendor?journal entrypayment to vendor ShareFacebook1 AnswerVotedRecent Palaktripathi 2020-08-31T19:46:15+05:30Added an answer on August 31, 2020 at 7:46 pm This answer was edited. As we all know, a payment is made when we purchase a good or service on a credit or cash basis. In terms of a business, a vendor (supplier/creditor) is a person who sells goods to the company on a cash or credit basis with an agreement to receive the payment within a specified period.This in turn affects the accounts payables as the vendors are the creditors of the company as well as considered a short-term liability and are recorded under the head of current liabilities in the balance sheet.Journal entry for payment to vendor1.Purchase a/cDebitDebit the increase in expenseTo Vendor a/cCreditCredit the increase in liability(being goods purchased from the vendor on credit)2.Vendor a/cDebitDebit the decrease in liabilityTo Cash a/cCreditCredit the decrease in asset(being payment made to the vendor)ExampleXYZ Ltd. purchased goods from a vendor amounting to 60,000 on a credit basis in May and agreed to make the due payment in July. The journal entries in the books of XYZ Ltd. are as follows:MayPurchase a/cDebit60,000To Vendor a/cCredit60,000(being goods purchased on credit from the vendor)JulyVendor a/cDebit60,000To Cash a/cCredit60,000(being payment made to the vendor in cash)Note: In case the company purchases the goods from the vendor directly for cash then only the following entry shall be passed in the books of accounts: Purchase a/c DebitDebit the increase in expense To Cash a/c CreditCredit the decrease in asset(being goods purchased from the vendor for cash)Hope this helps.0Reply Share ShareShare on FacebookShare on TwitterShare on LinkedInShare on WhatsAppLeave an answerCancel replyYou must login to add an answer. Username or email* Password* Captcha* Click on image to update the captcha. Remember Me! Forgot Password?