Bill discount financing refers to a kind of bank credit business in which the bill holder transfers the commercial bill to the bank when the funds are insufficient, and the bank pays the balance to the payee after deducting the discount interest according to the par value. It is the financial demand that enterprises put forward to banks to speed up capital turnover and promote commodity trading.
meaning
Before the drawer pays the discounted bills to the bank, the discounted bills receivable are the contingent liabilities of the enterprise. The enterprise issues bills by itself and discounts them to the bank, and the bank pays the balance after deducting the discount interest from the face value of the bills to the enterprise, which is called bill payable discount. The calculation of bills payable discount and realized amount is similar to that of bills receivable discount. When discounting bills payable, the account "Discounting bills payable" should be set for accounting, which is the deduction account of bills payable. Discounted bills payable shall be distributed on schedule and converted into interest expense.