Accountancy Dk Goel 2019 for Class 11 Commerce Accountancy Chapter 11

Question 1:

Calculate the due dates of the bills in the following cases:

	Date of the Bills	Period
I.	1st February, 2017	2 months
II.	31st January, 2017	3 months
III.	30th September, 2017	2 months
IV.	30th September, 2017	3 months
V.	29th December, 2017	2 months
VI.	31st December, 2017	2 months
VII.	15th July, 2017	30 days
VIII	27th January, 2016	1 month

Answer:

Due Date of Bill = Date of Bill Drawn + Period + Grace Days

S. No.	Date of Bill Drawn (1)	Period (2)	Grace Days (3)	Due Date (1 + 2 + 3)
I.	February 01, 2017	2 months	3 days	April 04, 2017
II.	January 31, 2017	3 months	3 days	May 03, 2017
III.	September 30, 2017	2 months	3 days	December 03, 2017
IV.	September 30, 2017	3 months	3 days	January 02, 2018
V.	December 29, 2017	2 months	3 days	March 03, 2018
VI.	December 31, 2017	2 months	3 days	March 03, 2018
VII.	July 15, 2017	30 days	3 days	August 17, 2017
VIII.	January 27, 2016	1 month	3 days	March 01, 2016

Question 2:

Find out the due dates of the bills in the following cases:

	Date of the Bills	Period
I.	29th May, 2017	4 months
II.	31st March, 2017	1 month
III.	21st July, 2017	60 days
IV.	14th May, 2017	90 days
V.	28th January, 2016	1 month
VI.	31st January, 2016	1 month
	Emergency holiday 22nd September.

Answer:

Due Date of Bill = Date of Bill Drawn + Period + Grace Days

S. No.	Date of Bill Drawn (1)	Period (2)	Grace Days (3)	Due Date (1 + 2 + 3)
I.	May 29, 2017	4 months	3 days	October 01, 2017
II.	March 31, 2017	1 month	3 days	May 03, 2017
III.	July 21, 2017	60 days	3 days	September 23, 2017
IV.	May 14, 2017	90 days	3 days	August 14, 2017
V.	January 28, 2016	1 month	3 days	March 02, 2016
VI.	January 31, 2016	1 month	3 days	March 03, 2016

Note: When due date falls on;

1. Public holiday (here October 2, 2017 and August 15, 2017), then due date is preceding date.

2. Emergency holiday (here September 22, 2017), then due date is succeeding date.

Question 3:

On 1st January, 2019, Ajay sold goods to Bhushan for ₹ 50,000. Ajay draws a bill of exchange for two months for the amount due which Bhushan accepts and returns it to Ajay. Bhushan met the bill on the due date. Pass Journal entries in the books of Ajay and Bhushan.

Answer:

Books of Ajay Journal
Date	Particulars		L.F.	Debit Amount (₹)	Credit Amount (₹)
2019
Jan. 01	Bhushan	Dr.		50,000
	To Sales A/c				50,000
	(Goods sold to Bhushan)

Jan. 01	Bills Receivable A/c	Dr.		50,000
	To Bhushan				50,000
	(Bhushan accepted the bill)

Mar. 04	Cash A/c	Dr.		50,000
	To Bills Receivable A/c				50,000
	(Bill honoured on maturity)

Books of Bhushan Journal
Date	Particulars		L.F.	Debit Amount (₹)	Credit Amount (₹)
2019
Jan. 01	Purchases A/c	Dr.		50,000
	To Ajay				50,000
	(Goods purchased from Ajay)

Jan. 01	Ajay	Dr.		50,000
	To Bills Payable A/c				50,000
	(Bill drawn by Ajay, accepted)

Mar. 04	Bills Payable A/c	Dr.		50,000
	To Cash A/c				50,000
	(Bill honoured on maturity)

Question 4:

On Jan. 1,2017, Tarun purchased goods from Arun for ₹ 20,000 and immediately drew a promissory note in favour of Arun payable after 1 month. Date of maturity of the promissory note was declared emergency holiday by the Government of India under the Negotiable Instrument Act 1881. Tarun met the promissory note according to the provisions of law.
Pass the necessary Journal entries in the books of Arun and Tarun.

Answer:

Books of Arun Journal
Date	Particulars		L.F.	Debit Amount (Rs)	Credit Amount (Rs)
2017
Jan. 01	Tarun	Dr.		20,000
	To Sales A/c				20,000
	(Goods sold to Tarun)

Jan. 01	Bills Receivable A/c	Dr.		20,000
	To Tarun				20,000
	(Tarun accepted the promissory note)

Feb. 05	Cash A/c	Dr.		20,000
	To Bills Receivable A/c				20,000
	(Promissory note honoured on maturity)

Books of Tarun Journal
Date	Particulars		L.F.	Debit Amount (Rs)	Credit Amount (Rs)
2017
Jan. 01	Purchases A/c	Dr.		20,000
	To Arun				20,000
	(Goods purchased from Arun)

Jan. 01	Arun	Dr.		20,000
	To Bills Payable A/c				20,000
	(Promissory note drawn by Arun, accepted)

Feb. 05	Bills Payable A/c	Dr.		20,000
	To Cash A/c				20,000
	(Promissory note honoured on maturity)

Note: When due date falls on Emergency holiday (here February 04, 2017), then due date is succeeding date i.e. February 05, 2017.

Question 5:

On Feb. 6, 2017 A sold goods for ₹ 1,00,000 to B. B paid 40% immediately on which A allowed a cash discount of ₹ 500. For the balance A drew a bill on B payable after 30 days. Due date of bill was a public holiday and the bill was met as per the provisions of Negotiable Instrument Act. Journalise the above transactions in the books of A and B.

Answer:

Books of A Journal
Date	Particulars		L.F.	Debit Amount (Rs)	Credit Amount (Rs)
2017
Feb. 06	B	Dr.		1,00,000
	To Sales A/c				1,00,000
	(Goods sold to B)

Feb. 06	Cash A/c	Dr.		39,500
	Discount Allowed A/c	Dr.		500
	Bills Receivable A/c	Dr.		60,000
	To B				1,00,000
	(B accepted the bill)

Mar. 10	Cash A/c	Dr.		60,000
	To Bills Receivable A/c				60,000
	(Bill honoured on maturity)

Books of B Journal
Date	Particulars		L.F.	Debit Amount (Rs)	Credit Amount (Rs)
2017
Feb. 06	Purchases A/c	Dr.		1,00,000
	To A				1,00,000
	(Goods purchased from A)

Feb. 06	A	Dr.		1,00,000
	To Cash A/c				39,500
	To Discount Received A/c				500
	To Bills Payable A/c				60,000
	(Bill drawn by A, accepted)

Mar. 10	Bills Payable A/c	Dr.		60,000
	To Cash A/c				60,000
	(Bill honoured on maturity)

Note: When due date falls on Public holiday (here March 11, 2017), then due date is preceding date i.e. March 10, 2017.

Question 6(A):

Vishal sold goods for ₹ 70,000 to Manju on Jan. 5, 2019 and drew upon her a bill of exchange payable after 2 months. Manju accepted Vishal's draft and handed over the same to Vishal after acceptance. Vishal immediately discounted the bill with his bank @ 12% p.a. On the due date Manju met her acceptance. Journalise the above transactions in the books of Vishal and Manju.

Answer:

Books of Vishal Journal
Date	Particulars		L.F.	Debit Amount (₹)	Credit Amount (₹)
2019
Jan. 05	Manju	Dr.		70,000
	To Sales A/c				70,000
	(Goods sold to Manju)

Jan. 05	Bills Receivable A/c	Dr.		70,000
	To Manju				70,000
	(Manju accepted the bill)

Jan. 05	Bank A/c	Dr.		68,600
	Discounting Charges A/c	Dr.		1,400
	To Bills Receivable A/c				70,000
	(Bill discounted with bank @ 12% p.a. for 2 months)

Books of Manju Journal
Date	Particulars		L.F.	Debit Amount (₹)	Credit Amount (₹)
2019
Jan. 05	Purchases A/c	Dr.		70,000
	To Vishal				70,000
	(Goods purchased from Vishal)

Jan. 05	Vishal	Dr.		70,000
	To Bills Payable A/c				70,000
	(Bill drawn by Vishal, accepted)

Mar. 08	Bills Payable A/c	Dr.		70,000
	To Cash A/c				70,000
	(Bill honoured on maturity)

Working Note:

Calculation of Discounting Charges

$Discounting Charges = 7, 000 \times \frac{12}{100} \times \frac{2}{12} = Rs 140$

Question 6(B):

On 15th February, 2019, X sold goods to Y for ₹ 60,000. On the same day, Y accepted a bill drawn upon him by X for three months for ₹ 60,000. X immediately discounted the bill at 15% p.a. at his bank and Y met the bill on maturity. Make Journal entries in the books of both the parties.

Answer:

Books of X Journal
Date	Particulars		L.F.	Debit Amount (₹)	Credit Amount (₹)
2019
Feb. 15	Y	Dr.		60,000
	To Sales A/c				60,000
	(Goods sold to Y)

Feb. 15	Bills Receivable A/c	Dr.		60,000
	To Y				60,000
	(Y accepted the bill)

Feb. 15	Bank A/c	Dr.		57,750
	Discounting Charges A/c	Dr.		2,250
	To Bills Receivable A/c				60,000
	(Bill discounted with bank @ 15% p.a. for 3 months)

Books of Y Journal
Date	Particulars		L.F.	Debit Amount (₹)	Credit Amount (₹)
2017
Feb. 15	Purchases A/c	Dr.		60,000
	To X				60,000
	(Goods purchased from X)

Feb. 15	X	Dr.		60,000
	To Bills Payable A/c				60,000
	(Bill drawn by X, accepted)

May 18	Bills Payable A/c	Dr.		60,000
	To Cash A/c				60,000
	(Bill honoured on maturity)

Working Note:

Calculation of Discounting Charges

$Discounting Charges = 6, 000 \times \frac{15}{100} \times \frac{3}{12} = Rs 225$

Question 7:

B owed ₹ 20,400 to A. On 15th January, 2019, he accepted a bill for ₹ 20,000 for two months drawn by A in full settlement of his debt. On 18th January, 2019, A endorsed the bill to his creditor C. The bill was duly met on the date of maturity. Pass Journal entries in the books of A, B and C.

Answer:

Books of A Journal
Date	Particulars		L.F.	Debit Amount (₹)	Credit Amount (₹)
2019
Jan.15	Bills Receivable A/c	Dr.		20,000
	Discount Allowed A/c	Dr.		400
	To B				20,400
	(B accepted the bill)

Jan. 18	C	Dr.		20,000
	To Bills Receivable A/c				20,000
	(Bill endorsed in favour of C)

Books of B Journal
Date	Particulars		L.F.	Debit Amount (₹)	Credit Amount (₹)
2019
Jan.15	A	Dr.		20,400
	To Bills Payable A/c				20,000
	To Discount Received A/c				400
	(Bill drawn by A, accepted)

Mar. 18	Bills Payable A/c	Dr.		20,000
	To Cash A/c				20,000
	(Bill honoured on maturity)

Books of C Journal
Date	Particulars		L.F.	Debit Amount (₹)	Credit Amount (₹)
2019
Jan. 18	Bills Receivable A/c	Dr.		20,000
	To A				20,000
	(Bills receivable was received from A)

Mar. 18	Cash A/c	Dr.		20,000
	To Bills Receivable A/c				20,000
	(Bill honoured on maturity)

Question 8:

On 10th January, 2017, A sells goods to B for ₹ 12,000. On that date, B accepted a bill drawn upon him by A at two months for ₹ 12,000. A retains the bill till due date and on due date sends the bill to the Banker for collection. In due course, A receives the information from the Bank that the bill has been duly met.
Pass Journal Entries in the books of A and B.

Answer:

Books of A Journal
Date	Particulars		L.F.	Debit Amount (Rs)	Credit Amount (Rs)
2017
Jan. 10	B	Dr.		12,000
	To Sales A/c				12,000
	(Goods sold to B)

Jan. 10	Bills Receivable A/c	Dr.		12,000
	To B				12,000
	(B accepted the bill)

Mar. 13	Bill Sent for Collection A/c	Dr.		12,000
	To Bills Receivable A/c				12,000
	(Bills sent to bank for collection)

Mar. 13	Bank A/c	Dr.		12,000
	To Bills Sent for Collection A/c				12,000
	(Bill honoured on maturity)

Books of B Journal
Date	Particulars		L.F.	Debit Amount (Rs)	Credit Amount (Rs)
2017
Jan. 10	Purchases A/c	Dr.		12,000
	To A				12,000
	(Goods purchased from A)

Jan .10	A	Dr.		12,000
	To Bills Payable A/c				12,000
	(Bill drawn by A, accepted)

Mar. 13	Bills Payable A/c	Dr.		12,000
	To Cash A/c				12,000
	(Bill honoured on maturity)

Question 9:

On Jan. 15, 2017, Kusum sold goods for ₹ 30,000 to Pushpa and drew upon her three bills of exchanges of ₹ 10,000 each payable after one month, two months and three months respectively. The first bill was retained by Kusum till its maturity. The second bill was endorsed by her in favour of her creditor Khushboo and the third bill was discounted by her immediately @ 6% p.a. All the bills were met by Pushpa. Journalise the above transactions in the books of Kusum and Pushpa.

Answer:

Books of Kusum Journal
Date	Particulars		L.F.	Debit Amount (Rs)	Credit Amount (Rs)
2017
Jan. 15	Pushpa	Dr.		30,000
	To Sales A/c				30,000
	(Goods sold to Pushpa)

Jan. 15	Bills Receivable A/c (1)	Dr.		10,000
	Bills Receivable A/c (2)	Dr.		10,000
	Bills Receivable A/c (3)	Dr.		10,000
	To Pushpa				30,000
	(Pushpa accepted the bills)

Jan. 15	Khushboo	Dr.		10,000
	To Bills Receivable A/c (2)				10,000
	(Bill endorsed in favour of Khushboo)

Jan. 15	Bank A/c	Dr.		9,850
	Discounting Charges A/c	Dr.		150
	To Bills Receivable A/c (3)				10,000
	(Bill discounted with the bank @ 6% p.a. for 3 months)

Feb. 18	Cash A/c	Dr.		10,000
	To Bills Receivable A/c (1)				10,000
	(Bill honoured on maturity)

Books of Pushpa Journal
Date	Particulars		L.F.	Debit Amount (Rs)	Credit Amount (Rs)
2017
Jan. 15	Purchases A/c	Dr.		30,000
	To Kusum				30,000
	(Goods purchased from Kusum)

Jan. 15	Kusum	Dr.		30,000
	To Bills Payable A/c (1)				10,000
	To Bills Payable A/c (2)				10,000
	To Bills Payable A/c (3)				10,000
	(Bills drawn by Kusum, accepted)

Feb. 18	Bills Payable A/c	Dr.		10,000
	To Cash A/c				10,000
	(Bill (1) honoured on maturity)

Mar. 18	Bills Payable A/c (2)	Dr.		10,000
	To Cash A/c				10,000
	(Bill (2) honoured on maturity)

Apr. 18	Bills Payable A/c (3)	Dr.		10,000
	To Cash A/c				10,000
	(Bill (3) honoured on maturity)

Working Note:

Calculation of Discounting Charges

Question 10:

X draws on Y a bill for ₹ 4,000 which was duly accepted by Y. Y meets the bill on its due date. Show what entries would be passed in the books of X and Y under each of the following circumstances:
(i) If X retains the bill till due date.
(ii) If X discounts the same with his banker paying ₹ 100 for discount.
(iii) If X endorses the same to his creditor Z, in full settlement of his debt of ₹ 4,080.
(iv) If X sends the bill to his banker for collection.

Answer:

Books of X Journal
Date	Particulars		L.F.	Debit Amount (Rs)	Credit Amount (Rs)
	*Bill drawn by X*
	Bills Receivable A/c	Dr.		4,000
	To Y				4,000
	(Y accepted the bill)

	Case (i): *Bill retained till maturity*
	Cash A/c	Dr.		4,000
	To Bills Receivable A/c				4,000
	(Bill honoued on maturity)

	Case (ii): *Bill discounted with bank*
	Bank A/c	Dr.		3,900
	Discounting Charges A/c	Dr.		100
	To Bills Receivable A/c				4,000
	(Bill discounted with the bank)

	Case (iii): *Bill endorsed to Z*
	Z	Dr.		4,080
	To Bills Receivable A/c				4,000
	To Discount Received A/c				80
	(Bill endorsed in favour of Z)

	Case (iv): *Bill sent to bank for collection*
	Bills Sent for Collection A/c	Dr.		4,000
	To Bills Receivable A/c				4,000
	(Bill sent to bank for collection)

	Bank A/c	Dr.		4,000
	To Bill Sent for Collection A/c				4,000
	(Bill honoured on maturity)

Books of Y Journal
Date	Particulars		L.F.	Debit Amount (Rs)	Credit Amount (Rs)
	*Bill accepted by Y*
	X	Dr.		4,000
	To Bills Payable A/c				4,000
	(Bill drawn by Y, accepted)

	*Same entry will be passed in all the four cases*
	Bills Payable A/c	Dr.		4,000
	To Cash A/c				4,000
	(Bill honoured on maturity)

Question 11:

X made the following sales to Y:

Date	Amount (₹)
Jan. 01, 2017	20,000
Jan. 08, 2017	25,000
Jan. 10, 2017	10,000
Jan. 15, 2017	40,000

For all the sales X drew bills on Y payable after 60 days. Bill drawn on Jan. 01, 2017 was retained by X with him till its due date. The bill drawn on Jan. 08, 2017 was discounted by X from the bank at 9% p.a. The bill drawn on Jan. 10, 2017 was endorsed by X to his creditor Z in full settlement of ₹ 10,400. On March 12, 2017 X sent the bill drawn on Jan. 15, 2017 to his bank for collection. All the bills were met by Y on due dates.
Pass necessary journal entries in the books of X and Y and prepare Y' s account in the books of X and X's account in the books of Y.

Answer:

Books of X Journal
Date	Particulars		L.F.	Debit Amount (Rs)	Credit Amount (Rs)
2017
Jan. 01	Y	Dr.		20,000
	To Sales A/c				20,000
	(Goods sold to Y)

Jan. 01	Bills Receivable A/c (1)	Dr.		20,000
	To Y				20,000
	(Y accepted the bill)

Jan. 08	Y	Dr.		25,000
	To Sales A/c				25,000
	(Goods sold to Y)

Jan. 08	Bills Receivable A/c (2)	Dr.		25,000
	To Y				25,000
	(Y accepted the bill)

Jan. 08	Bank A/c	Dr.		24,630
	Discounting Charges A/c	Dr.		370
	To Bills Receivable A/c (2)				25,000
	(Bill discounted with the bank @ 9% p.a. for 60 days)

Jan. 10	Y	Dr.		10,000
	To Sales A/c				10,000
	(Goods sold to Y)

Jan.10	Bills Receivable A/c (3)	Dr.		10,000
	To Y				10,000
	(Y accepted the bill)

Jan.10	Z	Dr.		10,400
	To Bills Receivable A/c (3)				10,000
	To Discount Received A/c				400
	(Bill endorsed in favour of Z)

Jan. 15	Y	Dr.		40,000
	To Sales A/c				40,000
	(Goods sold to Y)

Jan.15	Bills Receivable A/c (4)	Dr.		40,000
	To Y				40,000
	(Y accepted the bill)

Mar. 05	Cash A/c	Dr.		20,000
	To Bills Receivable A/c (1)				20,000
	(Bill honoured on maturity)

Mar. 12	Bill Sent for Collection A/c	Dr.		40,000
	To Bills Receivable A/c (4)				40,000
	(Bill sent to bank for collection)

Mar. 19	Bank A/c	Dr.		40,000
	To Bills for Collection A/c				40,000
	(Bill honoured on maturity)

Y’s Account
Dr.								Cr.
Date	Particulars	J.F.	Amount (Rs)	Date	Particulars	J.F.	Amount (Rs)
2017				2017
Jan. 01	Sales A/c		20,000	Jan. 01	Bills Receivable A/c (1)		20,000
Jan. 08	Sales A/c		25,000	Jan. 08	Bills Receivable A/c (2)		25,000
Jan. 10	Sales A/c		10,000	Jan. 10	Bills Receivable A/c (3)		10,000
Jan. 15	Sales A/c		40,000	Jan. 15	Bills Receivable A/c (4)		40,000
			95,000				95,000

Books of Y Journal
Date	Particulars		L.F.	Debit Amount (Rs)	Credit Amount (Rs)
2017
Jan. 01	Purchases A/c	Dr.		20,000
	To X				20,000
	(Goods purchased from X)

Jan. 01	X	Dr.		20,000
	To Bills Payable A/c (1)				20,000
	(Bill drawn by X, accepted)

Jan. 08	Purchases A/c	Dr.		25,000
	To X				25,000
	(Goods purchased from X)

Jan. 08	X	Dr.		20,000
	To Bills Payable A/c (2)				20,000
	(Bill drawn by X, accepted)

Jan. 10	Purchases A/c	Dr.		10,000
	To X				10,000
	(Goods purchased from X)

Jan.10	X	Dr.		10,000
	To Bills Payable A/c (3)				10,000
	(Bill drawn by X, accepted)

Jan. 15	Purchases A/c	Dr.		40,000
	To X				40,000
	(Goods purchased from X)

Jan. 15	X	Dr.		40,000
	To Bills Payable A/c (4)				40,000
	(Bill drawn by X, accepted)

Mar. 05	Bills Payable A/c (1)	Dr.		20,000
	To Cash A/c				20,000
	(Bill honoured on maturity)

Mar. 12	Bills Payable A/c (2)	Dr.		25,000
	To Cash A/c				25,000
	(Bill honoured on maturity)

Mar.14	Bills Payable A/c (3)	Dr.		10,000
	To Cash A/c				10,000
	(Bill honoured on maturity)

Mar.19	Bills Payable A/c (4)	Dr.		40,000
	To Cash A/c				40,000
	(Bill honoured on maturity)

X’s Account
Dr.								Cr.
Date	Particulars	J.F.	Amount (Rs)	Date	Particulars	J.F.	Amount (Rs)
2017				2017
Jan. 01	Bills Payable A/c (1)		20,000	Jan. 01	Purchases A/c		20,000
Jan. 08	Bills Payable A/c (2)		25,000	Jan. 08	Purchases A/c		25,000
Jan. 10	Bills Payable A/c (3)		10,000	Jan. 10	Purchases A/c		10,000
Jan. 15	Bills Payable A/c (4)		40,000	Jan. 15	Purchases A/c		40,000
			95,000				95,000

Working Note:

Calculation of Discounting Charges

$Discounting Charges = 25, 000 \times \frac{9}{100} \times \frac{60}{365} = Rs 370$

Question 12:

On January 1, 2017, Ajay sold goods to Balbir for ₹ 10,000 at a discount of 20%. On that date, Balbir accepted a bill, drawn on him by Ajay for ₹ 8,000 payable 3 months after sight. Having surplus funds, Balbir paid off the bill on 4th March, 2017 and was allowed a rebate of 18% per annum. Show Journal entries in the books of Ajay and Balbir.

Answer:

Book of Ajay Journal
Date	Particulars		L.F.	Debit Amount (Rs)	Credit Amount (Rs)
2017
Jan. 01	Balbir	Dr.		8,000
	Discount Allowed A/c			2,000
	To Sales A/c				10,000
	(Goods sold to Balbir)

Jan. 01	Bills Receivable A/c	Dr.		8,000
	To Balbir				8,000
	(Bill accepted by Balbir)

Mar. 04	Cash A/c	Dr.		7,880
	Rebate A/c	Dr.		120
	To Bills Receivable A/c				8,000
	(Bill retired under the rebate of 18% p.a. for one month)

Books of Balbir Journal
Date	Particulars		L.F.	Debit Amount (Rs)	Credit Amount (Rs)
2017
Jan. 01	Purchases A/c	Dr.		8,000
	To Ajay				8,000
	(Goods purchased from Ajay)

Jan.01	Ajay	Dr.		8,000
	To Bills Payable A/c				8,000
	(Bill drawn by Ajay, accepted)

Mar. 04	Bills Payable A/c	Dr.		8,000
	To Cash A/c				7,880
	To Rebate A/c				120
	(Bill retired under the rebate of 18% p.a. for one month)

Working Note:

Calculation of amount of Rebate

Amount of Rebate = 8, 000 \times \frac{18}{100} \times \frac{1}{12} = Rs 120

Question 13:

On 17th April, 2016, X sold goods to Y for ₹ 80,000 and draws a bill for 2 months upon Y for the amount due. Y accepted the bill and returned it to X. On due date the bill became dishonoured and X paid ₹ 400 as Noting Charges. Fifteen days later Y pays the amount due to X. Pass Journal entries in the books of both the parties.

Answer:

Books of X Journal
Date	Particulars		L.F.	Debit Amount (Rs)	Credit Amount (Rs)
2016
Apr. 17	Y	Dr.		80,000
	To Sales A/c				80,000
	(Goods sold to Y)

Apr. 17	Bills Receivable A/c	Dr.		80,000
	To Y				80,000
	(Y accepted the bill)

June 20	Y	Dr.		80,400
	To Bills Receivable A/c				80,000
	To Cash A/c				400
	(Bill dishonoured on due date and noting charges received)

July 05	Cash A/c	Dr.		80,400
	To Y				80,400
	(Cash received from Y)

Books of Y Journal
Date	Particulars		L.F.	Debit Amount (Rs)	Credit Amount (Rs)
2016
Apr. 17	Purchases A/c	Dr.		80,000
	To X				80,000
	(Goods purchased from X)

Apr. 17	X	Dr.		80,000
	To Bills Payable A/c				80,000
	(Bill drawn by X, accepted)

June 20	Bills Payable A/c	Dr.		80,000
	Noting Charges A/c	Dr.		400
	To X				80,400
	(Bills dishonoured on due date and notice charged paid)

July 05	X	Dr.		80,400
	To Cash A/c				80,400
	(Cash paid to X)

Question 14(A):

On 1st April, 2016, B accepts a bill drawn by A at three months for ₹ 8,000 in payment of debt. On the due date the acceptance is dishonoured and A gets the bill noted paying ₹ 100. On 4th July, 2016 A draws a new bill payable after 73 days provided interest is paid in cash @ 15% p.a. To this B is agreeable. The bill is met on maturity.
Record these transactions in the Journal of both the parties.

Answer:

Books of A Journal
Date	Particulars		L.F.	Debit Amount (Rs)	Credit Amount (Rs)
2016
Apr. 01	Bills Receivable A/c	Dr.		8,000
	To B				8,000
	(B accepted the bill)

July 04	B	Dr.		8,100
	To Bills Receivable A/c				8,000
	To Cash A/c				100
	(Bill dishonoured on due date and noting charges received)

July 04	B	Dr.		243
	To Interest A/c				243
	(Interest due to be received)

July 04	Cash A/c	Dr.		243
	Bills Receivable A/c	Dr.		8,100
	To B				8,343
	(B accepted the new bill)

Sept. 18	Cash	Dr.		8,100
	To Bills Receivable A/c				8,100
	(Bill honoured on maturity)

Books of B Journal
Date	Particulars		L.F.	Debit Amount (Rs)	Credit Amount (Rs)
2016
Apr. 01	A	Dr.		8,000
	To Bills Payable A/c				8,000
	(Bill drawn by A, accepted)

July 04	Bills Payable A/c	Dr.		8,000
	Noting Charges A/c	Dr.		100
	To A				8,100
	(Bill dishonoured on due date and noting charges paid)

July 04	Interest A/c	Dr.		243
	To A				243
	(Interest due to be paid)

July 04	A	Dr.		8,343
	To Cash A/c				243
	To Bills Payable A/c (New)				8,100
	(New bill drawn by A, accepted)

Sept. 18	Bills Payable A/c	Dr.		8,100
	To Cash A/c				8,100
	(Bill honoured on maturity)

Working Note:

Calculation of amount of Interest

$Amount of Interest = 8, 100 \times \frac{15}{100} \times \frac{73}{365} = Rs 243$

Question 14(B):

On 15th October, 2016, Y purchased goods worth ₹ 75,000 from X, and accepted a three months bill for this amount drawn by X. On the due date, it was dishonoured. Noting charges paid by X ₹ 600. On 18th January, 2017, Y requested X for renewal of the bill for another two months, for which X agrees, provided that interest is paid @ 15% p.a. in cash. Make Journal entries of these transactions in the books of X and Y.

Answer:

Books of X Journal
Date	Particulars		L.F.	Debit Amount (Rs)	Credit Amount (Rs)
2016
Oct. 15	Y	Dr.		75,000
	To Sales A/c				75,000
	(Goods sold to Y)

Oct. 15	Bills Receivable A/c	Dr.		75,000
	To Y				75,000
	(Y accepted the bill)
2017
Jan. 18	Y	Dr.		75,600
	To Bills Receivable A/c				75,000
	To Cash A/c				600
	(Bill dishonoured on due date and noting charges paid)

Jan. 18	Y	Dr.		1,890
	To Interest A/c				1,890
	(Interest due to be received)

Jan. 18	Cash A/c	Dr.		1,890
	Bills Receivable A/c	Dr.		75,600
	To Y				77,490
	(Y accepted the new bill)

Mar. 21	Cash	Dr.		75,600
	To Bills Receivable A/c				75,600
	(Bill honoured on maturity)

Books of Y Journal
Date	Particulars		L.F.	Debit Amount (Rs)	Credit Amount (Rs)
2016
Oct. 15	Purchases A/c	Dr.		75,000
	To X				75,000
	(Goods purchased from X)

Oct. 15	X	Dr.		75,000
	To Bills Payable A/c				75,000
	(Bill drawn by X, accepted)

2017
Jan. 18	Bills Payable A/c	Dr.		75,000
	Noting Charges A/c	Dr.		600
	To X				75,600
	(Bill dishonoured on due date and noting charges paid)

Jan. 18	Interest A/c	Dr.		1,890
	To X				1,890
	(Interest due to be paid)

Jan. 18	X	Dr.		77,490
	To Cash A/c				1,890
	To Bills Payable A/c				75,600
	(New bill drawn by X, accepted)

Mar. 21	Bills Payable A/c	Dr.		75,600
	To Cash A/c				75,600
	(Bill honoured on maturity)

Working Note:

Calculation of amount of Interest

Question 15:

On 1st January, 2018, Dinesh purchased goods from Chander for ₹ 60,000 plus CGST and SGST @ 6% each. Dinesh pays ₹ 7,200 in cash and accepts a bill drawn by Chander for the balance amount payable after two months. On the due date Dinesh is able to manage ₹ 20,000 in cash and he arranges with Chander for the retirement of the bill in consideration of this payment and a fresh bill at four months for the balance plus interest at 18% per annum. The second bill is duly met on maturity.
make the necessary Journal entries in the books of Chander and Dinesh.

Answer:

Books of Chander Journal
Date	Particulars		L.F.	Debit Amount (₹)	Credit Amount (₹)
2018
Jan. 01	Dinesh	Dr.		67,200
	To Sales A/c				60,000
	To Output CGST A/c				3,600
	To Output SGST A/c				3,600
	(Goods sold to Dinesh plus 6% Intra-state GST)

Jan. 01	Bills Receivable A/c	Dr.		60,000
	Cash A/c	Dr.		7,200
	To Dinesh				67,200
	(Dinesh paid cash in part and accepted a bill for the remaining amount)

Mar. 04	Dinesh	Dr.		60,000
	To Bills Receivable A/c				60,000
	(Bill cancelled on due date)

Mar. 04	Cash A/c	Dr.		20,000
	To Dinesh				20,000
	(Cash received from Dinesh)

Mar. 04	Dinesh	Dr.		2,400
	To Interest A/c				2,400
	(Interest due to be received)

Mar. 04	Bills Receivable A/c	Dr.		42,400
	To Dinesh				42,400
	(Dinesh accepted the new bill)

July 07	Cash A/c	Dr.		42,400
	To Bills Receivable A/c				42,400
	(Bill honoured on due date)

Books of Dinesh Journal
Date	Particulars		L.F.	Debit Amount (₹)	Credit Amount (₹)
2018
Jan. 01	Purchases A/c	Dr.		60,000
	Input CGST A/c	Dr.		3,600
	Input SGST A/c	Dr.		3,600
	To Chander				67,200
	(Goods purchased from Chander plus 6% intra-state GST)

Jan. 01	Chander	Dr.		67,200
	To Bills Payable A/c				60,000
	To Cash A/c				7,200
	(Part payment made in cash and for the remainning Bill drawn by Chander, accepted)

Mar. 04	Bills Payable A/c	Dr.		60,000
	To Chander				60,000
	(Bill dishonoured on due date)

Mar. 04	Chander	Dr.		20,000
	To Cash A/c				20,000
	(Cash paid to Chander)

Mar. 04	Interest A/c	Dr.		2,400
	To Chander				2,400
	(Interest due to be paid)

Mar. 04	Chander	Dr.		42,400
	To Bills Payable A/c				42,400
	(New bill drawn by Chander, accepted)

July 07	Bills Payable A/c	Dr.		42,400
	To Cash A/c				42,400
	(Cash paid to Chander)

Working Note:

Calculation of amount of Interest

Question 16:

A sells goods for ₹ 30,000 to B on 1st January, 2017 and on the same day draws a bill on B at three months for the amount. B accepts it and returns it to A, who discounts it on 4th February, 2017 with his bank at 18% per annum. The acceptance is dishonoured on the due date, the noting charges paid by the bank being ₹ 200.
On 4th April, 2017, B accepts a new bill at two months for the amount then due to A together with interest at 12 per cent per annum.
Make Journal entries to record these transactions in the books of A and B.

Answer:

Books of A Journal
Date	Particulars		L.F.	Debit Amount (Rs)	Credit Amount (Rs)
2017
Jan. 01	B	Dr.		30,000
	To Sales A/c				30,000
	(Goods sold to B)

Jan. 01	Bills Receivable A/c	Dr.		30,000
	To B				30,000
	(B accepted the bill)

Feb. 04	Bank A/c	Dr.		29,100
	Discounting Charges A/c	Dr.		900
	To Bills Receivable A/c				30,000
	(Bill discounted with the bank @ 18% p.a. for 2 months)

Apr. 04	B	Dr.		30,200
	To Bank A/c				30,200
	(Bill dishonoured on due date and noting charges paid)

Apr. 04	B	Dr.		604
	To Interest A/c				604
	(Interest due to be received)

Apr. 04	Bills Receivable A/c	Dr.		30,804
	To B				30,804
	(B accepted the new bill)

June 07	Cash A/c	Dr.		30,804
	To Bills Receivable A/c				30,804
	(Bill honoured on due date)

Books of B Journal
Date	Particulars		L.F.	Debit Amount (Rs)	Credit Amount (Rs)
2017
Jan. 01	Purchases A/c	Dr.		30,000
	To A				30,000
	(Goods purchased from A)

Jan. 01	A	Dr.		30,000
	To Bills Payable A/c				30,000
	(Bill drawn by A, accepted)

Apr. 04	Bills Payable A/c	Dr.		30,000
	Noting Charges A/c	Dr.		200
	To A				30,200
	(Bill dishonoured on due date and noting charges paid)

Apr. 04	Interest A/c	Dr.		604
	To A				604
	(Interest due to be paid)

Apr. 04	A	Dr.		30,804
	To Bills Payable A/c				30,804
	(New bill drawn by A, accepted)

June 07	Bills Payable A/c	Dr.		30,804
	To Cash A/c				30,804
	(Bill honoured on due date)

Working Note:

WN1 Calculation of Discounting Charges

Discounting Charges = 30, 000 \times \frac{18}{100} \times \frac{2}{12} = Rs 900

WN2 Calculation of amount of Interest

Amount of Interest = 30, 200 \times \frac{12}{100} \times \frac{2}{12} = Rs 604

Question 17:

On 21st Sept. 2017, Radhika sold goods for ₹ 2,00,000 to Parvati and drew upon later a bill for the same amount payable after 3 months. The bill was accepted by Parvati, Radhika discounted the bill from bank at a discount of 15% p.a. on 21st Oct., 2017. On maturity, the bill was dishonoured. Parvati agreed to pay ₹ 1,20,000 in cash including ₹ 3,000 interest and accepted a new bill for 3 months. The new bill was endorsed to Gayatri in full settlement of his account ₹ 85,000. It was duly met on maturity. Pass entries in the books of Radhika.

Answer:

Journal in the books of Radhika (Drawer)
Date	Particulars		L.F.	Debit Amount (₹)	Credit Amount (₹)
2017
Sept 21	Parvati’s A/c	Dr.		2,00,000
	To Sales A/c				2,00,000
	(Goods sold to Parvati)

Sept 21	Bills ReceivableA/c	Dr.		2,00,000
	To Parvati’s A/c				2,00,000
	(Bill received)

Oct 21	Bank A/c	Dr.		1,95,000
	Discounting Charges A/c	Dr.		5,000
	To Bills Receivable A/c				2,00,000
	(Bill discounted @ 15% for 2 months)

Dec 24	Parvati’s A/c	Dr.		2,00,000
	To Bank A/c				2,00,000
	(Bill dishonoured)

Dec 24	Parvati’s A/c	Dr.		3,000
	To Interest A/c				3,000
	(Interest due)

Dec 24	Cash A/c	Dr.		1,20,000
	Bill Receivable A/c	Dr.		83,000
	To Parvati’s A/c				2,03,000
	(Cash and new bill received from Parvati)

Dec 24	Gayatri’s A/c	Dr.		85,000
	To Bills Receivable A/c				83,000
	To Discount Received A/c				2,000
	(New bill endorsed in full settlement)

Question 18:

Asha sold goods worth ₹ 19,000 to Nisha on March 2, 2016. ₹ 4,000 were paid by Nisha immediately and for the balance she accepted a bill of exchange drawn upon her by Asha payable after three months. Asha discounted the bill immediately with her bank @ 10% p.a. On the due date Nisha dishonoured the bill and the bank paid ₹ 30 as noting charges.
On 5th June, Nisha paid ₹ 3,030 (including noting charges) in cash and accepted a new bill at one month for the amount due to Asha together with interest @ 15% p.a.
Record the necessary journal entries in the books of Asha and Nisha.

Answer:

Asha’s Journal
Date	Particulars		L.F.	Debit Amount (Rs)	Credit Amount (Rs)
2016
Mar.02	Nisha	Dr.		19,000
	To Sales A/c				19,000
	(Goods sold)

Mar.02	Bills Receivable A/c	Dr.		15,000
	Cash A/c	Dr.		4,000
	To Nisha				19,000
	(Acceptance received)

Mar.02	Bank A/c	Dr.		14,625
	Discounting Charges A/c	Dr.		375
	To Bills Receivable A/c				15,000
	(Bill discounted @10% p.a.)

June 05	Nisha (15,000 + 30)	Dr.		15,030
	To Bank A/c				15,030
	(Bill dishonored)

June 05	Nisha	Dr.		150
	To Interest A/c				150
	(Interest due)

June 05	Cash A/c	Dr.		3,030
	Bills Receivable (New) A/c (12,000 + 150)	Dr.		12,150
	To Nisha				15,180
	(New Acceptance received)

Working Notes:

1. Amount of Discount

= \frac{15, 000 \times 10 \times 3}{100 \times 12} = Rs 375

2. Amount of Interest

= \frac{12, 000 \times 15 \times 1}{100 \times 12} = Rs 150

Nisha’s Journal
Date	Particulars		L.F.	Debit Amount (Rs)	Credit Amount (Rs)
2016
Mar.02	Purchases A/c	Dr.		19,000
	To Asha				19,000
	(Goods purchased)

Mar.02	Asha	Dr.		19,000
	To Cash A/c				4,000
	To Bills Payable A/c				15,000
	(Acceptance received)

June.05	Bills Payable A/c	Dr.		15,000
	Noting Charges A/c	Dr.		30
	To Asha				15,030
	(Bill dishonored)

June.05	Interest A/c	Dr.		150
	To Asha				150
	(Interest due)

June.05	Asha	Dr.		15,180
	To Bills Payable A/c (12,000+150)				12,150
	To Cash A/c				3,030
	(New Acceptance received)

Question 19:

A sold goods for ₹ 40,000 to B on Jan. 01, 2017. He drew upon B a bill of exchange for the same amount payable after 1 month. B accepted the bill and sent it back to A. A discounted the bill immediately with his bank @ 9% p.a. On the due date B dishonoured the bill of exchange and the bank paid ₹ 200 as noting charges. B requested A to draw a new bill upon him with interest @ 12% p.a. which he agreed. The new bill was payable after 1 month. One week before the maturity of the second bill B requested A to cancel the second bill. He further requested to accept ₹ 15,000 in cash immediately and draw a third bill upon him including interest of ₹ 1,000. A agreed to B's request. The third bill was payable after one month. B met the third bill on its maturity. Record the necessary journal entries in the books of A and B and also prepare B's account in the books of A and A's account in the books of B.

Answer:

Books of A Journal
Date	Particulars		L.F.	Debit Amount (Rs)	Credit Amount (Rs)
2017
Jan. 01	B	Dr.		40,000
	To Sales A/c				40,000
	(Goods sold to B)

Jan. 01	Bills Receivable A/c	Dr.		40,000
	To B				40,000
	(B Accepted the bill)

Jan. 01	Bank A/c	Dr.		39,700
	Discount Charges A/c	Dr.		300
	To Bills Receivable A/c				40,000
	(Bill discounted with the bank @ 9% p.a. for 1 month)

Feb. 04	B	Dr.		40,200
	To Bank A/c				40,200
	(Bill dishonoured on due and noting charges paid)

Feb. 04	B	Dr.		402
	To Interest A/c				402
	(Interest due to be received)

Feb. 04	Bills Receivable A/c	Dr.		40,602
	To B				40,602
	(B accepted the new bill)

Feb. 28	B	Dr.		40,602
	To Bills Receivable A/c				40,602
	(New bill dishonoured)

Feb. 28	B	Dr.		1,000
	To Interest A/c				1,000
	(Interest due to be received)

Feb. 28	Cash A/c	Dr.		15,000
	To B				15,000
	(Cash received from B)

Feb. 28	Bills Receivable A/c	Dr.		26,602
	To B				26,602
	(B accepted the new bill)

Mar. 31	Cash A/c	Dr.		26,602
	To Bills Receivable A/c				26,602
	(Bill honoured on due date)

B’s Account
Dr.								Cr.
Date	Particulars	J.F.	Amount (Rs)	Date	Particulars	J.F.	Amount (Rs)
2017				2017
Jan. 01	Sales A/c		40,000	Jan. 01	Bills Receivable A/c		40,000
Feb. 04	Bank A/c		40,200	Feb. 04	Bills Receivable A/c		40,602
Feb. 04	Interest A/c		402	Feb. 28	Cash A/c		15,000
Feb. 28	Bills Receivable A/c		40,602	Feb. 28	Bills Receivable A/c		26,602
Feb. 28	Interest A/c		1,000
			1,22,204				1,22,204

Books of B Journal
Date	Particulars		L.F.	Debit Amount (Rs)	Credit Amount (Rs)
2017
Jan. 01	Purchases A/c	Dr.		40,000
	To A				40,000
	(Goods purchased from A)

Jan. 01	A	Dr.		40,000
	To Bills Payable A/c				40,000
	(Bill drawn by A, accepted)

Feb. 04	Bills Payable A/c	Dr.		40,000
	Noting Charges A/c	Dr.		200
	To A				40,200
	(Bill dishonoured on due date and noting charges paid)

Feb. 04	Interest A/c	Dr.		402
	To A				402
	(Interest due to be paid)

Feb. 04	A	Dr.		40,602
	To Bills Payable A/c				40,602
	(New bill drawn by A, accepted)

Feb. 28	Bills Payable A/c	Dr.		40,602
	To A				40,602
	(New bill dishonoured)

Feb. 28	Interest A/c	Dr.		1,000
	To A				1,000
	(Interest due to be paid)

Feb. 28	A	Dr.		15,000
	To Cash A/c				15,000
	(Cash paid to A)

Feb. 28	A			26,602
	To Bills Payable A/c				26,602
	(New bill drawn by A, accepted)

Mar. 31	Bills Payable A/c	Dr.		26,602
	To Cash A/c				26,602
	(Bill honoured on due date)

A’s Account
Dr.								Cr.
Date	Particulars	J.F.	Amount (Rs)	Date	Particulars	J.F.	Amount (Rs)
2017				2017
Jan. 01	Bills Payable A/c		40,000	Jan. 01	Purchases A/c		40,000
Feb. 04	Bills Payable A/c		40,602	Jan. 01	Bills Payable A/c		40,000
Feb. 28	Cash A/c		15,000	Feb. 04	Noting Charges A/c		200
Feb. 28	Bills Payable A/c		26,602	Feb. 04	Interest A/c		402
				Feb. 28	Bills Payable A/c		40,602
				Feb. 28	Interest A/c		1,000
			1,22,204				1,22,204

Working Notes:

WN1 Calculation of Discounting Charges

Discounting Charges = 40, 000 \times \frac{9}{100} \times \frac{1}{12} = Rs 300

WN2 Calculation of amount of Interest

Amount of Interest = 40, 200 \times \frac{12}{100} \times \frac{1}{12} = Rs 402

Question 20:

Journalise the following transaction in the books of Rajni:
Geeta's acceptance of ₹ 20,000 which had been discounted with the bank for ₹ 19,500 has been returned by the Bank dishonoured. Noting charges paid by Bank ₹ 25.

Answer:

Books of Rajni Journal
Date	Particulars		L.F.	Debit Amount (Rs)	Credit Amount (Rs)
	Geeta	Dr.		20,025
	To Bank A/c				20,025
	(Discounted bill dishonoured and noting charges paid)

Question 21(A):

A Bill receivable for ₹ 10,000, which had been discounted for ₹ 9,700, is dishonoured and the Bank paid ₹ 20 as noting charges.
Pass entries in the books of drawer and drawee.

Answer:

Books of Drawer Journal
Date	Particulars		L.F.	Debit Amount (Rs)	Credit Amount (Rs)
	Drawee’s A/c	Dr.		10,020
	To Bank A/c				10,020
	(Discounted bill dishonoured and noting charges paid)

Books of Drawee Journal
Date	Particulars		L.F.	Debit Amount (Rs)	Credit Amount (Rs)
	Bills Payable A/c	Dr.		10,000
	Noting Charges A/c	Dr.		20
	To Drawer’s A/c				10,020
	(Bills dishonoured and noting charges paid)

Question 21(B):

Journalise the following in the books of X:
Y's acceptance for ₹ 2,00,000 which was discounted by X from the bank has been dishonoured, noting charges paid by bank being ₹ 100.

Answer:

Books of X Journal
Date	Particulars		L.F.	Debit Amount (Rs)	Credit Amount (Rs)
	Y	Dr.		2,00,100
	To Bank A/c				2,00,100
	(Discounted bill dishonoured and noting charges paid)

Question 22:

On 10th April, 2018, Ravi purchased from Mohan goods for ₹ 30,000 plus CGST and SGST @ 9% each. Ravi paid ₹ 15,400 in cash and accepted a bill for two months for the balance amount drawn on him by Mohan. Mohan endorsed the bill to Rakesh. The bill was dishonoured on the due date. Rakesh had to spend ₹ 100 as noting charges.
Immediately after the dishonour, Mohan accepted a new bill drawn by Rakesh, in which ₹ 200 for interest were also included. After 20 days of the dishonour of the bill, Ravi paid full amount of Mohan including ₹ 50 as interest. Show Journal entries in the books of Ravi, Mohan and Rakesh.

Answer:

Books of Mohan Journal
Date	Particulars		L.F.	Debit Amount (₹)	Credit Amount (₹)
2018
Apr. 10	Ravi	Dr.		35,400
	To Sales A/c				30,000
	To Output CGST A/c				2,700
	To Output SGST A/c				2,700
	(goods sold plus 9% intra-state GST)

Apr. 10	Bills Receivable A/c	Dr.		20,000
	Cash A/c	Dr.		15,400
	To Ravi				35,400
	(Ravi paid in part and accepted the bill for remaining amount)

Apr. 10	Rakesh	Dr.		20,000
	To Bills Receivable A/c				20,000
	(Bill endorsed in favour of Rakesh)

June 13	Ravi	Dr.		20,100
	To Rakesh				20,100
	(Bill dishonoured on due date and noting charges to be paid)

June 13	Interest A/c	Dr.		200
	To Rakesh				200
	(Interest due to be paid to Rakesh)

June 13	Rakesh	Dr.		20,300
	To Bills Payable A/c				20,300
	(Bill drawn by Rakesh, accepted)

July 03	Ravi	Dr.		50
	To Interest A/c				50
	(Interest due to be received)

July 03	Cash A/c	Dr.		20,150
	To Ravi				20,150
	(Cash received from Ravi)

Books of Ravi Journal
Date	Particulars		L.F.	Debit Amount (₹)	Credit Amount (₹)
2018
Apr. 10	Purchases A/c	Dr.		30,000
	Input CGST A/c	Dr.		2,700
	Input SGST A/c	Dr.		2,700
	To Mohan				35,400
	(goods purchased plus 9% intra-state GST)

Apr. 10	Mohan	Dr.		35,400
	To Bills Payable A/c				20,000
	To Cash A/c				15,400
	(Part payment made and for the remaining amount bill drawn by Mohan, accepted)

June 13	Bills Payable A/c	Dr.		20,000
	Noting Charges A/c	Dr.		100
	To Mohan				20,100
	(Bill dishonoured on due date and noting charges to be paid)

July 03	Interest A/c	Dr.		50
	To Mohan				50
	(Interest due to be paid)

July 03	Mohan	Dr.		20,150
	To Cash A/c				20,150
	(Cash paid to Mohan)

Books of Rakesh Journal
Date	Particulars		L.F.	Debit Amount (₹)	Credit Amount (₹)
2018
Apr. 10	Bills Receivable A/c	Dr.		20,000
	To Mohan				20,000
	(Bill receivable received from Mohan)

June 13	Mohan	Dr.		20,100
	To Bills Receivable A/c				20,000
	To Cash A/c				100
	(Bill dishonoured on due date and noting charges paid)

June 13	Mohan	Dr.		200
	To Interest A/c				200
	(Interest due to be received)

June 13	Bills Receivable A/c	Dr.		20,300
	To Mohan				20,300
	(Mohan accepted the new bill)

Question 23:

On March 4, 2017, A purchased from B goods for ₹ 50,000. A paid 40% immediately and for the balance gave a promissory note to B payable after 30 days. B immediately endorsed the promissory note in favour of his creditor C for the full settlement of a debt of ₹ 31,000. On the due date the bill was dishonoured and C paid ₹ 100 as noting charges. On the same date C informed B about the dishonour of the bill. B settled his debt to C by cheque for ₹ 30,100 which includes noting charges. A settled B's claim by cheque for the same amount.
Record the necessary journal entries in the books of A, B and C for the above transactions and prepare A's and C's accounts in the books of B, B's account in the books of A and also B's account in the books of C.

Answer:

Books of B Journal
Date	Particulars		L.F.	Debit Amount (Rs)	Credit Amount (Rs)
2017
Mar. 04	A	Dr.		50,000
	To Sales A/c				50,000
	(Goods sold to A)

Mar. 04	Cash A/c	Dr.		20,000
	Bills Receivable A/c	Dr.		30,000
	To A				50,000
	(40% of the amount received in cash and for the remaining amount a promissory note has been accepted by A)

Mar. 04	C	Dr.		31,000
	To Bills Receivable A/c				30,000
	To Discount Received A/c				1,000
	(Promissory note endorsed in favour of C)

Apr. 06	A	Dr.		30,100
	To C				30,100
	(Promissory note dishonoured on due date and noting charges are paid by C)

Apr. 06	C	Dr.		31,100
	To Bank A/c				30,100
	(Cheque paid to C)

Apr. 06	Bank A/c	Dr.		30,100
	To A				30,100
	(Cheque received from A)

A’s Account
Dr.							Cr.
Date	Particulars	J.F.	Amount (Rs)	Date	Particulars	J.F.	Amount (Rs)
2017				2017
Mar. 04	Sales A/c		50,000	Mar. 04	Cash A/c		20,000
Apr. 06	C		30,100	Mar. 04	Bills Receivable A/c		30,000
				Apr. 06	Bank A/c		30,100
			80,100				80,100

C’s Account
Dr.								Cr.
Date	Particulars	J.F.	Amount (Rs)	Date	Particulars	J.F.	Amount (Rs)
2017				2017
Mar. 04	Bills Receivable A/c		30,000	Mar. 04	Balance b/d		31,000
Mar. 04	Discount Received A/c		1,000	Apr. 06	A		30,100
Apr. 06	Bank A/c		30,100
			61,100				61,100

Books of A

Journal

Date

Particulars

L.F.

Debit

Amount

(Rs)

Credit

Amount

(Rs)

2017

Mar. 04

Purchases A/c

Dr.

50,000

To B

50,000

(Goods purchased from B)

Mar. 04

B

Dr.

50,000

To Cash A/c

20,000

To Bills Payable A/c

30,000

(40% of the amount paid in cash and for the remaining amount a promissory note has been accepted)

Apr. 06

Bills Payable A/c

Dr.

30,000

Noting Charges A/c

Dr.

100

To B

30,100

(Promissory note dishonoured on due date and noting charges to be paid)

Apr. 06

B

Dr.

30,100

To Bank A/c

30,100

(Cheque paid to B)

B’s Account
Dr.							Cr.
Date	Particulars	J.F.	Amount (Rs)	Date	Particulars	J.F.		Amount (Rs)
2017				2017
Mar. 04	Cash A/c		20,000	Mar. 04	Purchases A/c			50,000
Mar. 04	Bills Payable A/c		30,000	Apr. 06	Bills Payable A/c			30,000
Apr. 06	Bank A/c		30,100	Apr. 06	Noting Charges A/c			100
			80,100					80,100

Books of C Journal
Date	Particulars		L.F.	Debit Amount (Rs)	Credit Amount (Rs)
2017
Mar. 04	Bills Receivable A/c	Dr.		30,000
	Discount Allowed A/c	Dr.		1,000
	To B				31,000
	(Promissory note received from B)

Apr. 06	B	Dr.		30,100
	To Bills Receivable A/c	Dr.			30,000
	To Cash A/c				100
	(Promissory note dishonoured on due date and noting charges paid)

Apr. 06	Bank A/c	Dr.		30,100
	To B				31,100
	(Cheque received from B)

B’s Account
Dr.								Cr.
Date	Particulars	J.F.	Amount (Rs)	Date	Particulars	J.F.	Amount (Rs)
2017				2017
Mar. 04	Balance b/d		31,000	Mar. 04	Bills Receivable A/c		30,000
Apr. 06	Bills Receivable A/c		30,000	Mar. 04	Discount Allowed A/c		1,000
Apr. 06	Cash A/c		100	Apr. 06	Bank A/c		30,100
			61,100				61,100

Question 24:

On Feb. 01, 2017, Mohan sold goods worth ₹ 25,000 to Naresh and drew upon him a bill payable after 90 days. Naresh accepted the bill and Mohan endorsed the bill immediately in favour of his creditor Raja in full settlement of his account of ₹ 25,300. One week before the maturity of the bill Naresh requested Mohan to cancel the bill and draw upon him a new bill including interest of ₹ 400. Mohan agreed to it. Mohan immediately took the bill from Raja by making the payment to him and then drew upon Naresh a new bill for 30 days which was duly met by Naresh on due date.
Pass necessary entries in the books of Mohan.

Answer:

Books of Mohan Journal
Date	Particulars		L.F.	Debit Amount (Rs)	Credit Amount (Rs)
2017
Feb. 01	Naresh	Dr.		25,000
	To Sales A/c				25,000
	(Goods sold to Naresh)

Feb. 01	Bills Receivable A/c	Dr.		25,000
	To Naresh				25,000
	(Naresh accepted the bill)

Feb. 01	Raja	Dr.		25,300
	To Bills Receivable A/c				25,000
	To Discount Received A/c				300
	(Bills receivable endorsed in favour of Raja)

Apr. 27	Naresh	Dr.		25,000
	To Raja				25,000
	(Bills receivable cancelled)

Apr. 27	Raja	Dr.		25,000
	To Cash A/c				25,000
	(Cash paid to Raja)

Apr. 27	Naresh	Dr.		400
	To Interest A/c				400
	(Interest due to be received)

Apr. 27	Bills Receivable A/c	Dr.		25,400
	To Naresh				25,400
	(Naresh accepted the new bill)

May 30	Cash A/c	Dr.		25,400
	To Bills Receivable A/c				25,400
	(Bill honoured on due date)

Question 25:

A purchased goods for ₹ 15,000 from B on March 01, 2017 and accepted a bill of exchange drawn by B for the same amount. The bill was payable after 60 days. On April 28, B sent the bill to his bank for collection. The bill was duly presented by the bank. A dishonoured the bill and the bank paid ₹ 150 as noting charges.
Record the necessary journal entries for the above transactions in the books of A and B.

Answer:

Books of B Journal
Date	Particulars		L.F.	Debit Amount (Rs)	Credit Amount (Rs)
2017
Mar. 01	A	Dr.		15,000
	To Sales A/c				15,000
	(Goods sold to A)

Mar. 01	Bills Receivable A/c	Dr.		15,000
	To A				15,000
	(A accepted the bill)

Apr. 28	Bill Sent for Collection A/c	Dr.		15,000
	To Bills Receivable A/c				15,000
	(Bill sent to bank for collection)

May 03	A	Dr.		15,150
	To Bill Sent for Collection A/c				15,000
	To Bank A/c				150
	(Bill dishonoured on due date and bank noting charges paid by bank)

Books of A Journal
Date	Particulars		L.F.	Debit Amount (Rs)	Credit Amount (Rs)
2017
Mar. 01	Purchases A/c	Dr.		15,000
	To B				15,000
	(Goods purchased from B)

Mar. 01	B	Dr.		15,000
	To Bills Payable A/c				15,000
	(Bill drawn by B, accepted)

May 03	Bills Payable A/c	Dr.		15,000
	Noting Charges A/c	Dr.		150
	To B				15,150
	(Bill dishonoured on due date and noting charges paid)

Question 26:

Vimal purchased goods ₹ 25,000 from Kamal on Jan. 15, 2017 and accepted a bill of exchange drawn upon him by Kamal payable after two months. On the date of the maturity the bill was duly presented for payment. Vimal dishonoured the bill.
Record the necessary journal entries in the books of Kamal and Vimal when :
(i) The bill was retained by Kamal till the date of its maturity.
(ii) The bill was immediately discounted by Kamal with is bank @ 6% p.a.
(iii) The bill was endorsed by Kamal in favour of his creditor Sharad.
(iv) Five days before its maturity the bill was sent by Kamal to his bank for collection.

Answer:

Books of Kamal Journal
Date	Particulars		L.F.	Debit Amount (Rs)	Credit Amount (Rs)
2017
Jan. 15	Vimal	Dr.		25,000
	To Sales A/c				25,000
	(Goods sold to Vimal)

Jan. 15	Bills Receivable A/c	Dr.		25,000
	To Vimal				25,000
	(Vimal accepted the bill)

	Case-(i): *Bill retained till maturity*
Mar. 18	Vimal	Dr.		25,000
	To Bills Receivable A/c				25,000
	(Bill dishonoured on due date)

	Case-(ii): *Bill discounted with bank @ 6% p.a.*
Jan. 15	Bank A/c	Dr.		24,750
	Discounting Charges A/c	Dr.		250
	To Bills Receivable A/c				25,000
	(Bill discounted with bank @ 6% p.a. for 2 months)

Mar. 18	Vimal	Dr.		25,000
	To Bank A/c				25,000
	(Bill dishonoured on due date)

	Case-(iii): *Bill endorsed in favour of Sharad*
Jan. 15	Sharad	Dr.		25,000
	To Bills Receivable A/c				25,000
	(Bill endorsed in favour of Sharad)

Mar. 18	Vimal	Dr.		25,000
	To Sharad				25,000
	(Bill dishonoured on due date)

	Case-(iv): *Bill sent to bank for collection*
Mar. 13	Bills Sent for Collection A/c	Dr.		25,000
	To Bills Receivable A/c				25,000
	(Bill sent to bank for collection)

Mar. 18	Vimal	Dr.		25,000
	To Bills Sent for Collection A/c				25,000
	(Bill dishonoured on due date)

Books of Vimal Journal
Date	Particulars		L.F.	Debit Amount (Rs)	Credit Amount (Rs)
2017
Jan. 15	Purchases A/c	Dr.		25,000
	To Kamal				25,000
	(Goods purchased from Kamal)
	*Same entry will be passed in all the four cases*
Mar. 18	Bills Payable A/c	Dr.		25,000
	To Kamal				25,000
	(Bill dishonoured on due date)

Question 27:

X draws upon Y a bill of ₹ 10,000 for three months on 1st July, 2016. The bill was duly accepted and returned by Y. On due date bill became dishonoured and noting charges paid under each of the following circumstances ₹ 75. Pass entries in the following cases:
(i) If drawer retains the bill with him till due date.
(ii) If drawer discounts the same with his Banker and noting charges paid by the Banker.
(iii) If drawer endorses the same to his creditor Z and noting charges paid by Z.
(iv) If drawer sends the bill for collection to his Banker and noting charges paid by the Banker.

Answer:

Books of X Journal
Date	Particulars		L.F.	Debit Amount (Rs)	Credit Amount (Rs)
2016
July 01	Bills Receivable A/c	Dr.		10,000
	To Y				10,000
	(Y accepted the bill)

	Case (i): *Bill retains till due date*
Oct. 04	Y	Dr.		10,075
	To Bills Receivable A/c				10,000
	To Cash A/c				75
	(Bill dishonoured on due date and noting charges paid)

	Case (ii): *Bill discounted with the bank*
July 01	Bank A/c	Dr.		10,000
	To Bills Receivable A/c				10,000
	(Bill discounted with bank)

Oct. 04	Y	Dr.		10,075
	To Bank A/c				10,075
	(Bill dishonoured on due date and noting charges paid by bank)

	Case (iii): *Bill endorsed to Z*
July 01	Z	Dr.		10,000
	To Bills Receivable A/c				10,000
	(Bill endorsed in favour of Z)

Oct. 04	Y	Dr.		10,075
	To Z				10,075
	(Bill dishonoured on due date and noting charges paid by Z)

	Case (iv): *Bill sent to bank for collection*
July 01	Bill Sent for Collection A/c	Dr.		10,000
	To Bills Receivable A/c				10,000
	(Bill sent to bank for collection)

Oct. 04	Y	Dr.		10,075
	To Bill Sent for Collection A/c				10,000
	To Bank A/c				75
	(Bill dishonoured on due date and noting charges paid by bank)

Books of Y Journal
Date	Particulars		L.F.	Debit Amount (Rs)	Credit Amount (Rs)
2016
July 01	X	Dr.		10,000
	To Bills Payable A/c				10,000
	(Bill drawn by X, accepted)

	*Same entry will be passed in both the cases*
Oct. 04	Bills Payable A/c	Dr.		10,000
	Noting Charges A/c	Dr.		75
	To X				10,075
	(Bill dishonored on due date and noting charges paid)

Books of Z Journal
Date	Particulars		L.F.	Debit Amount (Rs)	Credit Amount (Rs)
2016
July 01	Bills Receivable A/c	Dr.		10,000
	To X				10,000
	(Bills receivable, received from X)

Oct. 04	X	Dr.		10,075
	To Bills Receivable A/c				10,000
	To Cash A/c				75
	(Bill dishonored on due date and noting charges paid)

Question 28:

What Journal entry will be passed in the books of drawer (X) and drawee (Y) at the time of dishonour of bill in the following cases:
(i) If bill of ₹ 50,000 was discounted from bank and noting charges paid by the bank was ₹ 600.
(ii) If B/R of ₹ 50,000 was endorsed in favour of Z. Noting charges paid by Z ₹ 600.
(iii) If B/R is returned with drawer and noting charges were ₹ 600.

Answer:

X’s Journal
Date	Particulars		L.F.	Debit Amount (Rs)	Credit Amount (Rs)

(i)	Y	Dr.		50,600
	To Bank A/c				50,600
	(Bill dishonored)

(ii)	Y	Dr.		50,600
	To Z				50,600
	(Bill endorsed to Z, dishonored)

(iii)	Y	Dr.		50,600
	To Bills Receivable A/c				50,000
	To Cash A/c				600
	(Bill dishonored)

Y’s Journal
Date	Particulars		L.F.	Debit Amount (Rs)	Credit Amount (Rs)

(i)	Bills Payable A/c	Dr.		50,000
	Noting Charges A/c	Dr.		600
	To X				50,600
	(Bill dishonored)

(ii)	Bills Payable A/c	Dr.		50,000
	Noting Charges A/c	Dr.		600
	To X				50,600
	(Bill dishonored)

(iii)	Bills Payable A/c	Dr.		50,000
	Noting Charges A/c	Dr.		600
	To X				50,600
	(Bill dishonored)

Question 29:

A sold goods to B for ₹ 60,000 Charging IGST @18% and immediately drew a bill on B who duly accepted the same. A endorsed the bill to C. C endorsed it to his creditor D. D discounted the bill for ₹ 68,000. On the date of maturity, the bill was dishonoured and Bank paid noting charges amounting to ₹ 200.
Show Journal entries in the books of all the parties to record these transactions.

Answer:

Books of A Journal
Date	Particulars		L.F.	Debit Amount (₹)	Credit Amount (₹)
	B	Dr.		70,800
	To Sales A/c				60,000
	To Output IGST A/c				10,800
	(Goods sold to B plus 18% Inter-state GST)

	Bills Receivable A/c	Dr.		70,800
	To B				70,800
	(B accepted the bill)

	C	Dr.		70,800
	To Bills Receivable A/c				70,800
	(Bill endorsed in favour of C)

	B	Dr.		71,000
	To C				71,000
	(Bills dishonoured on due date and noting charges receivable from B and payable to C)

Books of B Journal
Date	Particulars		L.F.	Debit Amount (₹)	Credit Amount (₹)
	Purchases A/c	Dr.		60,000
	Input IGST A/c	Dr.		10,800
	To A				70,800
	(Goods purchased from A)

	A	Dr.		70,800
	To Bills Payable A/c				70,800
	(Bill drawn by A, accepted)

	Bills Payable A/c	Dr.		70,800
	Noting Charges A/c	Dr.		200
	To A				71,000
	(Bill dishonoured on due date and noting charges paid)

Books of C Journal
Date	Particulars		L.F.	Debit Amount (₹)	Credit Amount (₹)
	Bills Receivable A/c	Dr.		70,800
	To A				70,800
	(Bills receivable, received from A)

	D	Dr.		70,800
	To Bills Receivable A/c				70,800
	(Bill endorsed in favour of D)

	A	Dr.		71,000
	To D				71,000
	(Bill dishonoured on due date and noting charges receivable from A and payable to D)

Books of D Journal
Date	Particulars		L.F.	Debit Amount (₹)	Credit Amount (₹)
	Bills Receivable A/c	Dr.		70,800
	To C				70,800
	(Bills receivable, received from C)

	Bank A/c	Dr.		68,000
	Discounting Charges A/c	Dr.		2,800
	To Bills Receivable A/c				70,800
	(Bill discounted with bank)

	C	Dr.		71,000
	To Bank A/c				71,000
	(Bill dishonoured on due date and noting charges paid by bank)

Question 30:

On 1st Jan., 2016, Satish drew on Harish three bills of exchange in full settlement of claims, the first for ₹ 14,000 at one month; the second for ₹ 16,000 at two months and the third for ₹ 18,000 at three months. The bills were duly accepted by Harish. The first bill was endorsed by Satish to his creditor Rajnish on 3rd Jan., 2016.
The second bill was discounted on 15th Jan. for ₹ 15,900 and the third bill was sent to bank for collection on 4th Feb. All the bills were met on maturity except the second bill which was dishonoured, noting charges being paid ₹ 240. Satish charged ₹ 300 for interest from Harish and drew on him a fourth bill for two months for ₹ 16,540. The fourth bill was duly met on maturity.
Give Journal entries in the books of Satish and Harish.

Answer:

Books of Satish Journal
Date	Particulars		L.F.	Debit Amount (Rs)	Credit Amount (Rs)
2016
Jan. 01	Bills Receivable A/c (1)	Dr.		14,000
	Bills Receivable A/c (2)	Dr.		16,000
	Bills Receivable A/c (3)	Dr.		18,000
	To Harish				48,000
	(Harish accepted bills)

Jan. 03	Rajnish	Dr.		14,000
	To Bills Receivable A/c (1)				14,000
	(Bill endorsed in favour of Rajnish)

Jan. 15	Bank A/c	Dr.		15,900
	Discounting Charges A/c	Dr.		100
	To Bills Receivable A/c (2)				16,000
	(Bills discounted with bank at discount of Rs 100)

Feb. 04	Bill Sent for Collection A/c	Dr.		18,000
	To Bills Receivable A/c (3)				18,000
	(Bill sent to bank for collection)

Mar. 04	Harish	Dr.		16,240
	To Bank A/c				16,240
	(Bill dishonoured on due date and noting charges paid)

Mar. 04	Harish	Dr.		300
	To Interest A/c				300
	(Interest due to be received)

Mar. 04	Bills Receivable A/c (4)	Dr.		16,540
	To Harish				16,540
	(Harish accepted the new bill)

Apr. 04	Bank A/c	Dr.		18,000
	To Bills Sent for Collection A/c				18,000
	(Bill honoured on due date)

May 07	Cash A/c	Dr.		16,540
	To Bills Receivable A/c (4)				16,540
	(Bill honoured on due date)

Books of Harish Journal
Date	Particulars		L.F.	Debit Amount (Rs)	Credit Amount (Rs)
2016
Jan. 01	Satish	Dr.		48,000
	To Bills Payable A/c (1)				14,000
	To Bills Payable A/c (2)				16,000
	To Bills Payable A/c (3)				18,000
	(Bill drawn by Satish, accepted)

Feb. 04	Bills Payable A/c (1)	Dr.		14,000
	To Cash A/c				14,000
	(Bill honoured on due date)

Mar. 04	Bills Payable A/c (2)	Dr.		16,000
	Noting Charges A/c	Dr.		240
	To Satish				16,240
	(Bill dishonoured on due date and noting charges paid)

Mar. 04	Interest A/c	Dr.		300
	To Satish				300
	(Interest due to be paid)

Mar.04	Satish	Dr.		16,540
	To Bills Payable A/c (4)				16,540
	(New bill drawn by Satish, accepted)

Apr. 04	Bills Payable A/c (3)	Dr.		18,000
	To Cash A/c				18,000
	(Bill honoured on due date)

May 07	Bills Payable A/c (4)	Dr.		16,540
	To Cash A/c				16,540
	(Bill honoured on due date)

Question 31:

On 1st January, 2010, Arun purchased from Barun goods invoiced at ₹ 10,000. On the same date, Barun drew upon Arun a bill for the amount at 2 months and Arun accepted the same. On 4th January, 2010, Barun got the bill discounted with his bank @12% per annum. On due date, Arun told Barun that he was not in a position to pay the full amount and requested Barun to accept ₹ 5,000 in cash and draw a fresh bill at 2 months for the remaining amount plus interest at 15% per annum, Barun agreed. The second bill was duly met on the due date.
Give journal entries to record the above transactions in the books of Barun.

Answer:

Books of Barun Journal
Date	Particulars		L.F.	Debit Amount (Rs)	Credit Amount (Rs)
2010
Jan. 01	Arun	Dr.		10,000
	To Sales A/c				10,000
	(Goods sold to Arun)

Jan. 01	Bills Receivable A/c	Dr.		10,000
	To Arun				10,000
	(Arun accepted the bill)

Jan. 04	Bank A/c	Dr.		9,800
	Discounting Charges A/c	Dr.		200
	To Bills Receivable A/c				10,000
	(Bill discounted with the bank @ 12% p.a. for 2 months)

Mar. 04	Arun	Dr.		10,000
	To Bank A/c				10,000
	(Bill cancelled on due date)

Mar. 04	Cash	Dr.		5,000
	To Arun				5,000
	(Cash received from Arun)

Mar. 04	Arun	Dr.		125
	To Interest A/c				125
	(Interest due to be received)

Mar. 04	Bills Receivable A/c	Dr.		5,125
	To Arun				5,125
	(Arun accepted the new bill)

May 07	Cash A/c	Dr.		5,125
	To Bills Receivable A/c				5,125
	(Bill honoured on due date

Working Note:

WN 1Calculation of Discounting Charges

$Discounting Charges = 10, 000 \times \frac{12}{100} \times \frac{2}{12} = Rs 200$

WN2 Calculation of amount of Interest

$Amount of Interest = 5, 000 \times \frac{15}{100} \times \frac{2}{12} = Rs 125$

Question 32:

Darshan sold goods for ₹ 40,000 to Varun on 8.1.2017 and drew upon him a bill of exchange payable after two months. Varun accepted the bill and returned the same to Darshan. On the due date the bill was met by Varun. Record the necessary Journal entries in the books of Darshan and Varun in the following circumstances:
When the bill was retained by Darshan till the date of its maturity.
When Darshan immediately discounted the bill @6% p.a. with his bank.
When the bill was endorsed immediately by Darshan in favour of his creditor Suresh.
When three days before its maturity, the bill was sent by Darshan to his bank for collection.

Answer:

Books of Darshan Journal
Date	Particulars		L.F.	Debit Amount (Rs)	Credit Amount (Rs)
2017
Jan. 08	Varun	Dr.		40,000
	To Sales A/c				40,000
	(Goods sold to Varun)

Jan. 08	Bills Receivable A/c	Dr.		40,000
	To Varun				40,000
	(Varun accepted the bill)

	Case-I: *Bill retained till maturity*
Mar. 11	Cash A/c	Dr.		40,000
	To Bills Receivable A/c				40,000
	(Bill honoured on due date)

	Case-II: *Bill discounted with the bank*
Jan. 08	Bank A/c	Dr.		39,600
	Discounting Charges A/c	Dr.		400
	To Bills Receivable A/c				40,000
	(Bills discounted with the bank @ 6% p.a. for 2 months)

	Case-III: *Bill endorsed in favour of Suresh*
Jan. 08	Suresh	Dr.		40,000
	To Bills Receivable A/c				40,000
	(Bill endorsed in favour of Suresh)

	Case-IV: *Bill sent to bank for collection*
Mar. 11	Bill Sent for Collection A/c	Dr.		40,000
	To Bills Receivable A/c				40,000
	(Bills sent to bank for collection)

Mar. 11	Bank A/c	Dr.		5,125
	To Bill Sent for Collection A/c				5,125
	(Bill honoured on due date)

Books of Varun Journal
Date	Particulars		L.F.	Debit Amount (Rs)	Credit Amount (Rs)
2017
Jan. 08	Purchases A/c	Dr.		40,000
	To Darshan				40,000
	(Goods purchased from Darshan)

Jan. 08	Darshan	Dr.		40,000
	To Bills Payable A/c				40,000
	(Bill drawn by Darshan, accepted)

	*Same entry will be passed in all the four cases*
Mar. 11	Bills Payable A/c	Dr.		40,000
	To Cash A/c				40,000
	(Bill honoured on due date)

Working Note:

Calculation of Discounting Charges

$Discounting Charges = 40, 000 \times \frac{6}{100} \times \frac{2}{12} = Rs 400$

Question 33:

On Jan. 1, 2017 Neha sold goods for ₹ 20,000 to Muskan and drew upon her a bill of exchange payable after two months. One month before the maturity of the bill Muskan approached Neha to accept the payment against the bill at a rebate @12% p.a. Neha agreed to the request of Muskan and Muskan retired the bill under the agreed rate of rebate.
Journalise the above transactions in the books of Neha and Muskan.

Answer:

Books of Neha Journal
Date	Particulars		L.F.	Debit Amount (Rs)	Credit Amount (Rs)
2017
Jan. 01	Muskan	Dr.		20,000
	To Sales A/c				20,000
	(Goods sold to Muskan)

Jan. 01	Bills Receivable A/c	Dr.		20,000
	To Muskan				20,000
	(Muskan accepted the bill)

Feb. 04	Cash A/c	Dr.		19,800
	Rebate A/c	Dr.		200
	To Bills Receivable A/c				20,000
	(Bill retired under the rebate @ 12% p.a. for 1 month)

Books of Muskan Journal
Date	Particulars		L.F.	Debit Amount (Rs)	Credit Amount (Rs)
2017
Jan. 01	Purchases A/c	Dr.		20,000
	To Neha				20,000
	(Goods purchased from Neha)

Jan. 01	Neha	Dr.		20,000
	To Bills Payable A/c				20,000
	(Bill drawn by Neha, accepted)

Feb. 04	Bills Payable A/c	Dr.		20,000
	To Cash A/c				19,800
	To Rebate A/c				200
	(Bill retired under the rebate of 12% p.a. before one month)

Working Note:

Calculation of amount of Rebate

$Amount of Rebate = 20, 000 \times \frac{12}{100} \times \frac{1}{12} = Rs 200$

Question 34:

Leena sold goods to Meena on March 01, 2009 for ₹ 68,000 and drew two bills of exchange of the equal amount upon Meena payable after three months. Leena immediately discounted the first bill with her bank at 12% p.a. The bill was dishonoured by Meena and Bank paid ₹ 55 as noting charges.
The second bill was retired on May 04, 2009 under a rebate of 6% p.a. with mutual agreement.
Journalise the above in the books of Leena and Meena.

Answer:

Books of Leena Journal
Date	Particulars		L.F.	Debit Amount (Rs)	Credit Amount (Rs)
2009
Mar. 01	Meena	Dr.		68,000
	To Sales A/c				68,000
	(Goods sold to Meena)

Mar. 01	Bills Receivable A/c (1)	Dr.		34,000
	Bills Receivable A/c (2)	Dr.		34,000
	To Meena				68,000
	(Meena accepted bills)

Mar. 01	Bank A/c	Dr.		32,980
	Discounting Charges A/c	Dr.		1,020
	To Bills Receivable A/c				34,000
	(Bill discounted with the bank @ 12% p.a. for 3 months)

May 04	Cash A/c	Dr.		33,830
	Rebate A/c	Dr.		170
	To Bills Receivable A/c (2)				34,000
	(Bill retired under the rebate of 6% p.a. for 1 month)

June 04	Meena	Dr.		34,055
	To Bank A/c				34,055
	(Bill dishonoured on due date and noting charges paid by bank)

Books of Meena Journal
Date	Particulars		L.F.	Debit Amount (Rs)	Credit Amount (Rs)
2009
Mar. 01	Purchases A/c	Dr.		68,000
	To Leena				68,000
	(Goods purchased from Leena)

Mar. 01	Leena	Dr.		68,000
	To Bills Payable A/c (1)				34,000
	To Bills Payable A/c (2)				34,000
	(Bills drawn by Leena, accepted)

May 04	Bills Payable A/c (2)	Dr.		34,000
	To Cash A/c				33,830
	To Rebate A/c				170
	(Bill retired under the rebate of 6% p.a. for 1 month)

June 04	Bills Payable A/c (1)	Dr.		34,000
	Noting Charges A/c	Dr.		55
	To Leena				34,055
	(Bill dishonoured on due date and noting charges paid)

Working Notes:

WN1 Calculation of Discounting Charges

$Discounting Charges = 34, 000 \times \frac{12}{100} \times \frac{3}{12} = Rs 1, 020$

WN2 Calculation of amount of Rebate

$Amount of Rebate = 34, 000 \times \frac{6}{100} \times \frac{1}{12} = Rs 170$

Question 35:

Anita purchased goods for ₹ 23,000 from Kavita on October 15, 2009 and accepted a bill of exchange drawn upon her by Kavita payable after two months. On the date of maturity the bill was duly presented for payment. Anita dishonoured the bill. The payee noted with ₹ 95 as noting charges.
Record the necessary journal entries in the books of Kavita and Anita, when (a) The bill was immediately discounted by Kavita with her Bank @ 9% p.a. (b) The bill was endorsed by Kavita in favour of her creditor Shankar after one month.

Answer:

Books of Kavita Journal
Date	Particulars		L.F.	Debit Amount (Rs)	Credit Amount (Rs)
2009
Oct. 15	Anita	Dr.		23,000
	To Sales A/c				23,000
	(Goods sold to Anita)

Oct. 15	Bills Receivable A/c	Dr.		23,000
	To Anita				23,000
	(Anita accepted the bill)

	Case-(a): *Bill discounted with the bank*
Oct. 15	Bank A/c	Dr.		22,655
	Discounting Charges A/c	Dr.		345
	To Bills Receivable A/c				23,000
	(Bills discounted with the bank @ 9% p.a. for 2 months)

Dec. 18	Anita	Dr.		23,095
	To Bank A/c				23,095
	(Bill dishonoured on due date and noting charges paid by bank)

	Case-(b): *Bill endorsed in favour of Shankar*
Oct. 15	Shankar	Dr.		23,000
	To Bills Receivable A/c				23,000
	(Bill endorsed in favour of Shankar)

Dec. 18	Anita	Dr.		23,095
	To Shankar				23,095
	(Bill dishonoured on due date and noting charges are receivable by Shankar and payable by Anita)

Books of Anita Journal
Date	Particulars		L.F.	Debit Amount (Rs)	Credit Amount (Rs)
2009
Oct. 15	Purchases A/c	Dr.		23,000
	To Kavita				23,000
	(Goods purchased from Kavita)

Oct. 15	Kavita	Dr.		23,000
	To Bills Payable A/c				23,000
	(Bill drawn by Kavita, accepted)

	*Same entry will be passed in both the cases*
Dec. 18	Bills Payable A/c	Dr.		23,000
	Noting Charges A/c	Dr.		95
	To Kavita				23,095
	(Bill dishonoured on due date and noting charges paid)

Working Note:

Calculation of Discounting Charges

Discounting Charges = 23, 000 \times \frac{9}{100} \times \frac{2}{12} = Rs 345

Question 36:

Abdulla sold goods to Tahir on Jan. 17, 2017 for ₹ 18,000. He drew a bill of exchange for the same amount on Tahir for 45 days. On the same date Tahir accepted the bill and returned it to Abdulla. On the due date Abdulla presented the bill to Tahir which was dishonoured. Abdulla paid ₹ 40 as noting charges. Five days after the dishonour of his acceptance Tahir settled his debt by making a payment of ₹ 18,700 including interest and noting charges.
Record the necessary journal entries in the books of Abdulla and Tahir. Also prepare Tahir's account in the books of Abdulla and Abdulla's account in the books of Tahir.

Answer:

Books of Abdulla Journal
Date	Particulars		L.F.	Debit Amount (Rs)	Credit Amount (Rs)
2017
Jan. 17	Tahir	Dr.		18,000
	To Sales A/c				18,000
	(Goods sold to Tahir)

Jan. 17	Bills Receivable A/c	Dr.		18,000
	To Tahir				18,000
	(Tahir accepted the bill)

Mar. 06	Tahir	Dr.		18,040
	To Bills Receivable A/c				18,000
	To Cash A/c				40
	(Bill dishonoured on due date and noting charges paid)

Mar. 11	Tahir (18,700 – 18,040)	Dr.		660
	To Interest A/c				660
	(Interest due to be received)

Mar. 11	Cash A/c	Dr.		18,700
	To Tahir				18,700
	(Cash received from Tahir)

Tahir’s Account
Dr.								Cr.
Date	Particulars	J.F.	Amount (Rs)	Date	Particulars	J.F.	Amount (Rs)
2017				2017
Jan. 17	Sales A/c		18,000	Jan. 17	Bills Receivable A/c		18,000
Mar. 06	Bills Receivable A/c		18,000	Mar. 11	Cash A/c		18,700
Mar. 06	Cash A/c		40
Mar. 11	Interest A/c		660
			36,700				36,700

Books of Tahir Journal
Date	Particulars		L.F.	Debit Amount (Rs)	Credit Amount (Rs)
2017
Jan. 01	Purchases A/c	Dr.		18,000
	To Abdulla				18,000
	(Goods purchased from Abdulla)

Jan. 01	Abdulla	Dr.		18,000
	To Bills Payable A/c				18,000
	(Bill drawn by Abdulla, accepted)

Mar. 06	Bills Payable A/c	Dr.		18,000
	Noting Charges A/c	Dr.		40
	To Abdulla				18,040
	(Bill dishonoured on due date and noting charges paid)

Mar. 11	Interest A/c (18,700 – 18,040)	Dr.		660
	To Abdulla				660
	(Interest due to be paid)

Mar. 11	Abdulla	Dr.		18,700
	To Cash A/c				18,700
	(Cash paid to Abdulla)

Abdulla’s Account
Dr.								Cr.
Date	Particulars	J.F.	Amount (Rs)	Date	Particulars	J.F.	Amount (Rs)
2017				2017
Jan. 17	Bills Payable A/c		18,000	Jan. 17	Purchases A/c		18,000
Mar. 11	Cash A/c		18,700	Mar. 06	Bills Payable A/c		18,000
				Mar. 06	Noting Charges A/c		40
				Mar. 11	Interest A/c		660
			36,700				36,700

Question 37:

X sold goods to Y on 1.3.2017 for ₹ 12,000 and drew upon Y a bill of exchange for the same amount payable after two months. X immediately discounted the bill with his bank at 9% p.a. The maturity date of the bill was a non business day (holiday), therefore, X had to present the bill as per the provisions of the Indian Instruments Act, 1881. The bill was dishonoured by Y and X paid ₹ 45 as noting charges. Y settled the claim of X five days after the dishonour of the bill by a cheque which included interest @ 12% for the term of the bill.
Journalise the above transactions in the books of X and Y and prepare Y's account in the books of X and X's account in the books of Y.

Answer:

Books of X Journal
Date	Particulars		L.F.	Debit Amount (Rs)	Credit Amount (Rs)
2017
Mar. 01	Y	Dr.		12,000
	To Sales A/c				12,000
	(Goods sold to Y)

Mar. 01	Bills Receivable A/c	Dr.		12,000
	To Y				12,000
	(Y accepted the bill)

Mar.01	Bank A/c	Dr.		11,820
	Discounting Charges A/c	Dr.		180
	To Bills Receivable A/c				12,000
	(Bills discounted with the bank @ 9% p.a. for 2 month)

May 03	Y	Dr.		12,045
	To Bank A/c				12,045
	(Bills dishonoured on due date and noting charges paid)

May 08	Y	Dr.		241
	To Interest A/c				241
	(Interest due to be received)

May 08	Bank A/c	Dr.		12,286
	To Y				12,286
	(Cheque received from Y)

Y’s Account
Dr.								Cr.
Date	Particulars	J.F.	Amount (Rs)	Date	Particulars	J.F.	Amount (Rs)
2017				2017
Mar. 01	Sales A/c		12,000	Mar. 01	Bills Receivable A/c		12,000
May 03	Bank A/c		12,045	May 08	Bank A/c		12,286
May 08	Interest A/c		241
			24,286				24,286

Books of Y Journal
Date	Particulars		L.F.	Debit Amount (Rs)	Credit Amount (Rs)
2017
Mar. 01	Purchases A/c	Dr.		12,000
	To X				12,000
	(Goods purchased from X)

Mar. 01	X	Dr.		12,000
	To Bills Payable A/c				12,000
	(Bill drawn by X, accepted)

May 03	Bills Payable A/c	Dr.		12,000
	Noting Charges A/c	Dr.		45
	To X				12,045
	(Bill dishonoured on due date and noting charges paid)

May 08	Interest A/c	Dr.		241
	To X				241
	(Interest due to be paid)

May 08	X	Dr.		12,286
	To Bank A/c				12,286
	(Cheque issued from X)

X’s Account
Dr.								Cr.
Date	Particulars	J.F.	Amount (Rs)	Date	Particulars	J.F.	Amount (Rs)
2017				2017
Mar. 01	Bills Payable A/c		12,000	Mar. 01	Purchases A/c		12,000
May 08	Bank A/c		12,286	May 03	Bills Payable A/c		12,000
				May 03	Noting Charges A/c		45
				May 08	Interest A/c		241
			24,286				24,286

Working Notes:

WN1 Calculation of Discounting Charges

Discounting Charges = 12, 000 \times \frac{9}{100} \times \frac{2}{12} = Rs 180

WN2 Calculation of amount of Interest

Amount of Interest = 12, 045 \times \frac{12}{100} \times \frac{2}{12} = Rs 241

Note: When due date falls on Public holiday or Sunday or Gazetted holiday (here May 4, 2017), then due date is preceding date (here May 03, 2017).

Question 38:

On 1st February 2018, A sold goods to B for ₹ 40,000 Charging CGST and SGST @ 9% each. B pays ₹ 17,200 in cash and accepted a three months bill for the balance. On the due date, B expressed his inability to meet the bill and offered ₹ 12,000 in cash and to accept a new bill for one month for the balance plus interest at 18% p.a. A agrees to the proposal. On the due date the bill was duly honoured by B. Pass entries in the books of A and B.

Answer:

Books of A Journal
Date	Particulars		L.F.	Debit Amount (₹)	Credit Amount (₹)
2018
Feb. 01	B	Dr.		47,200
	To Sales A/c				40,000
	To Output CGST A/c				3,600
	To Output SGST A/c				3,600
	(Goods sold to B plus 9% intra-state GST)

Feb. 01	Cash A/c	Dr.		17,200
	Bills Receivable A/c	Dr.		30,000
	To B				40,000
	(Rs 17,200 received in cash from B and he accepted the bill for the remaining amount)

May 04	B	Dr.		30,000
	To Bills Receivable A/c				30,000
	(Bill cancelled on due date)

May 04	Cash	Dr.		12,000
	To B				12,000
	(Rs 12,000 received in cash from B)

May 04	B	Dr.		270
	To Interest A/c				270
	(Interest due to be received)

May 04	Bills Receivable A/c	Dr.		18,270
	To B				18,270
	(B accepted the new bill)

June 07	Cash A/c	Dr.		18,270
	To Bills Receivable A/c				18,270
	(Bill honoured on due date)

Books of B Journal
Date	Particulars		L.F.	Debit Amount (₹)	Credit Amount (₹)
2018
Feb. 01	Purchases A/c	Dr.		40,000
	Input CGST A/c	Dr.		3,600
	Input SGST A/c	Dr.		3,600
	To A				47,200
	(Goods purchased from A)

Feb. 01	A	Dr.		47,200
	To Cash A/c				17,200
	To Bills Payable A/c				30,000
	(Rs 17,200 paid in cash and for the remaining amount bill has been accepted)

May 04	Bills Payable A/c	Dr.		30,000
	To A				30,000
	(Bill cancelled on due date)

May 04	A	Dr.		12,000
	To Cash A/c				12,000
	(Rs 12,000 paid in cash to A)

May 04	Interest A/c	Dr.		270
	To A				270
	(Interest due to be paid)

May 04	A	Dr.		18,270
	To Bills Payable A/c				18,270
	(New Bill drawn by A, accepted)

June 07	Bills Payable A/c	Dr.		18,270
	To Cash A/c				18,270
	(Bill honoured on due date)

Working Note:

Calculation of amount of Interest

$Amount of Interest = 18, 000 \times \frac{18}{100} \times \frac{1}{12} = Rs 270$

Question 39:

On 15th January 2018, X sold goods to Y for ₹ 50,000 charging IGST @ 12%. Y immediately paid ₹ 6,000 in cash and accepted two bills of equal amount, the first for one month and the second for two months. The first bill was met on due date but on the due date of the second bill, Y requested that the bill be renewed for a further period of two months. X agreed provided that interest at 15% p.a. was paid immediately in cash. Y agreed to this. The second bill was met on the due date.
Give journal entries in the books of X and Y.

Answer:

Books of X Journal
Date	Particulars		L.F.	Debit Amount (Rs)	Credit Amount (Rs)
2018
Jan. 15	Y	Dr.		56,000
	To Sales A/c				50,000
	To Output IGST A/c				6,000
	(Goods sold to Y plus 12% inter-state GST)

Jan. 15	Bills Receivable A/c (1)	Dr.		25,000
	Bills Receivable A/c (2)	Dr.		25,000
	Cash A/c	Dr.		6,000
	To Y				56,000
	(Y accepted bills)

Feb. 18	Cash A/c	Dr.		25,000
	To Bills Receivable A/c (1)				25,000
	(Bill honoured on due date)

Mar. 18	Y	Dr.		25,000
	To Bills Receivable A/c (2)				25,000
	(Bill cancelled on due date)

Mar. 18	Y	Dr.		625
	To Interest A/c				625
	(Interest due to be paid)

Mar. 18	Cash A/c	Dr.		625
	Bills Receivable A/c	Dr.		25,000
	To Y				25,625
	(Interest received in cash by Y and a bill has also been accepted by him)

May 21	Cash A/c	Dr.		25,000
	To Bills Receivable A/c				25,000
	(Bill honoured on due date)

Books of Y Journal
Date	Particulars		L.F.	Debit Amount (Rs)	Credit Amount (Rs)
2018
Jan. 15	Purchases A/c	Dr.		50,000
	Input IGST A/c	Dr.		6,000
	To X				56,000
	(Goods purchased from X)

Jan. 15	X	Dr.		56,000
	To Bills Payable A/c (1)				25,000
	To Bills Payable A/c (2)				25,000
	To Cash A/c				6,000
	(Bills drawn by X, accepted)

Feb. 18	Bills Payable A/c (1)	Dr.		25,000
	To Cash A/c				25,000
	(Bill honoured on due date)

Mar. 18	Bills Payable A/c (2)	Dr.		25,000
	To X				25,000
	(Bill cancelled on due date)

Mar. 18	Interest A/c	Dr.		625
	To X				625
	(Interest due to be paid)

Mar. 18	X	Dr.		25,625
	To Cash A/c				625
	To Bills Payable A/c				25,000
	(Interest is paid in cash and a new bill drawn by X, accepted)

May 21	Bills Payable A/c	Dr.		25,000
	To Cash A/c				25,000
	(Bill honoured on due date)

Working Note:

Calculation of amount of Interest

$Amount of Interest = 25, 000 \times \frac{15}{100} \times \frac{2}{12} = Rs 625$

Question 40:

On 1st January 2017, Amar sold goods to Akbar for ₹ 60,000. Akbar accepts two bills of ₹ 25,000 for 2 months, and ₹ 35,000 for 3 months.
The first bill was discounted from bank on 3rd January 2017 for ₹ 24,900 and 2nd bill endorsed to Anthony on 15th January 2017.
First bill was met on maturity but second bill got dishonoured and noting charges of ₹ 200 being paid. Amar charged ₹ 300 as Interest and drew another bill for the amount due for further 2 months. This bill was met on maturity.
Pass the necessary Journal Entries in the books of Amar, Akbar and Anthony.

Answer:

Journal in the books of Amar (Drawer)
Date	Particulars		L.F.	Debit Amount (₹)	Credit Amount (₹)
2017
Jan 01	Akbar’s A/c	Dr.		60,000
	To Sales A/c				60,000
	(Goods sold to Akbar)

Jan 01	Bills Receivable I A/c	Dr.		25,000
	Bills Receivable II A/c			35,000
	To Parvati’s A/c				60,000
	(Bills received)

Jan 03	Bank A/c	Dr.		24,900
	Discounting Charges A/c	Dr.		100
	To Bills ReceivableI A/c				25,000
	(Bill discounted)

Jan 15	Anthony’s A/c	Dr.		35,000
	To Bills Receivable II A/c				35,000
	(Bill endorsed)

Apr 04	Akbar’s A/c	Dr.		35,200
	To Anthony’s A/c				35,200
	(Bill dishonoured)

Apr 04	Akbar’s A/c	Dr.		300
	To Interest A/c				300
	(Interest due)

Apr 04	Bill Receivable A/c	Dr.		35,500
	To Parvati’s A/c				35,500
	(New bill received from Akbar)

June 07	Cash A/c	Dr.		35,500
	To Bills Receivable A/c				35,500
	(New bill met on maturity)

Journal in the books of Akbar (Drawee)
Date	Particulars		L.F.	Debit Amount (₹)	Credit Amount (₹)
2017
Jan 01	Purchases A/c	Dr.		60,000
	To Amar’s A/c				60,000
	(Goods purchased from Amar)

Jan 01	Amar’s A/c	Dr.		60,000
	To Bills Payable I A/c	Dr.			25,000
	To Bills Payable II A/c				35,000
	(Bills accepted)

Mar 04	Bills Payable I A/c	Dr.		25,000
	To Cash A/c				25,000
	(Payment made for bill I)

Apr 04	Bills Payable II A/c	Dr.		35,000
	Noting Charges A/c	Dr.		200
	To Amar’s A/c				35,200
	(Bill Payable II dishonoured)

Apr 04	Interest A/c	Dr.		300
	To Amar’s A/c				300
	(Interest due)

Apr 04	Amar’s A/c	Dr.		35,500
	To Bills Payable A/c				35,500
	(New bill accepted)

June 07	Bills Payable A/c	Dr.		35,500
	To Cash A/c				35,500
	(Bill honoured)

Journal in the books of Anthony (Endorsee)
Date	Particulars		L.F.	Debit Amount (₹)	Credit Amount (₹)
2017
Jan 15	Bills Receivable A/c	Dr.		35,000
	To Amar’s A/c				35,000
	(Bill received from Amar)

Apr 04	Amar’s A/c	Dr.		35,200
	To Bills Receivable A/c				35,000
	To Cash A/c				200
	(Bill dishonoured)

Question 41:

Manohar drew a bill of exchange on Pushkar, his debtor, for ₹ 20,000 on 1st March 2016 for 3 months. Pushkar accepted the same and returned it to the drawer. Manohar endorsed the bill to Yadu on 1st April 2016 for a debt of equal amount. Yadu discounted it with the bank at 15% p.a. on 1st May 2016. On the due date the bill was dishonoured. (Noting charges amounted to ₹ 100).
Show the journal entries in the books of :
(a) Drawer, (b) Drawee/Acceptor, and (c) Endorsee

Answer:

Books of Manohar Journal
Date	Particulars		L.F.	Debit Amount (Rs)	Credit Amount (Rs)
2016
Mar. 01	Bills Receivable A/c	Dr.		20,000
	To Pushkar				20,000
	(Pushkar accepted the bill)

Apr. 01	Yadu	Dr.		20,000
	To Bills Receivable A/c				20,000
	(Bills endorsed in favour of Yadu)

June 04	Pushkar	Dr.		20,100
	To Yadu				20,100
	(Bill dishonoured on due date and noting charges paid by Yadu)

Books of Pushkar Journal
Date	Particulars		L.F.	Debit Amount (Rs)	Credit Amount (Rs)
2016
Mar. 01	Manohar	Dr.		20,000
	To Bills Payable A/c				20,000
	(Bill drawn by Manohar, accepted)

June 04	Bills Payable A/c	Dr.		20,000
	Noting Charges A/c	Dr.		100
	To Manohar				20,100
	(Bill dishonoured on due date and noting charges paid)

Books of Yadu Journal
Date	Particulars		L.F.	Debit Amount (Rs)	Credit Amount (Rs)
2016
Apr. 01	Bills Receivable A/c	Dr.		20,000
	To Manohar				20,000
	(Bills receivable, received from Manohar)

May 01	Bank A/c	Dr.		19,750
	Discounting Charges A/c	Dr.		250
	To Bills Receivable A/c				20,000
	(Bill discounted with the bank @ 15% p.a. for 1 month)

June 04	Manohar	Dr.		20,100
	To Bank A/c				20,100
	(Bill dishonoured on due date and noting charges paid)

Working Note:

Calculation of Discounting Charges

Discounting Charges = 20, 000 \times \frac{15}{100} \times \frac{1}{12} = Rs 250

Question 42:

On 1st January 2017, Hari drew on Gopal, who is his debtor for ₹ 60,000 three bills of exchange: First for ₹ 15,000 at one month, Second for ₹ 20,000 at two months and third for ₹ 25,000 at three months. Gopal accepted all the three bills.

On 5th January 2017, Hari endorsed the first bill to his creditor Satish in full settlement of his account of ₹ 15,200. This bill was duly met on maturity.

On 1st February 2017, the second bill was discounted from the bank @ 12% p.a. This bill was dishonoured on the due date and bank paid ₹ 120 as noting charges. On Gopal's request, Hari drew a fourth bill on Gopal for 2 months for the amount due plus interest @ 15% p.a.

Third bill was paid under a rebate of 12% p.a. one month before maturity. The fourth bill was sent to bank for collection on 4th May 2017 and was duly met on maturity.
Pass Journal entries in the books of Hari, Gopal and Satish.

Answer:

Books of Hari Journal
Date	Particulars		L.F.	Debit Amount (Rs)	Credit Amount (Rs)
2017
Jan. 01	Bills Receivable A/c (1)	Dr.		15,000
	Bills Receivable A/c (2)	Dr.		20,000
	Bills Receivable A/c (3)	Dr.		25,000
	To Gopal				60,000
	(Gopal accepted all the bills)

Jan. 05	Satish	Dr.		15,200
	To Bills Receivable A/c (1)				15,000
	To Discount Received A/c				200
	(Bill endorsed in favour of Satish)

Feb. 01	Bank A/c	Dr.		19,800
	Discounting Charges A/c	Dr.		200
	To Bills Receivable A/c (2)				20,000
	(Bill discounted with the bank @ 12% p.a. for 1 month)

Mar. 04	Gopal	Dr.		20,120
	To Bank A/c				20,120
	(Bill dishonoured on due date and noting charges paid by bank)

Mar. 04	Gopal	Dr.		503
	To Interest A/c				503
	(Interest due to be received)

Mar. 04	Bills Receivable A/c (4)	Dr.		20,623
	To Gopal				20,623
	(Gopal accepted the new bill)

Mar. 04	Cash A/c	Dr.		24,750
	Rebate A/c	Dr.		250
	To Bills Receivable A/c (3)				25,000
	(Bill retired under the rebate of 12% p.a. for 1 month)

May 04	Bill Sent for Collection A/c	Dr.		20,623
	To Bills Receivable A/c (4)				20,623
	(Bill sent to bank for collection)

May 07	Bank A/c	Dr.		20,623
	To Bills for Collection A/c				20,623
	(Bill honoured on due date)

Books of Gopal Journal
Date	Particulars		L.F.	Debit Amount (Rs)	Credit Amount (Rs)
2017
Jan. 01	Hari	Dr.		60,000
	To Bills Payable A/c (1)				15,000
	To Bills Payable A/c (2)				20,000
	To Bills Payable A/c (3)				25,000
	(Bills drawn by Hari, accepted)

Feb. 04	Bills Payable A/c (1)	Dr.		15,000
	To Cash A/c				15,000
	(Bill honoured on due date)

Mar. 04	Bills Payable A/c	Dr.		20,000
	Noting Charges A/c	Dr.		120
	To Hari				20,120
	(Bill dishonoured on due date and noting charges paid)

Mar. 04	Interest A/c	Dr.		503
	To Hari				503
	(Interest due to be paid)

Mar. 04	Hari	Dr.		20,623
	To Bills Payable A/c (4)				20,623
	(Bill drawn by Hari, accepted)

Mar. 04	Bills Payable A/c (3)	Dr.		25,000
	To Cash A/c				24,750
	To Rebate A/c				250
	(Bill retired under the rebate of 12% for 1 month)

May 07	Bills Payable A/c (4)	Dr.		20,623
	To Cash A/c				20,623
	(Bill honoured on due date)

Books of Satish Journal
Date	Particulars		L.F.	Debit Amount (Rs)	Credit Amount (Rs)
2017
Jan. 05	Bills Receivable A/c	Dr.		15,000
	Discount Allowed A/c	Dr.		200
	To Hari				15,200
	(Bills receivable, received from Hari)

Feb. 04	Cash A/c	Dr.		15,000
	To Bills Receivable A/c				15,000
	(Bill honoured on due date)

Working Note:

WN1 Calculation of Discounting Charges

Discounting Charges = 20, 000 \times \frac{12}{100} \times \frac{1}{12} = Rs 200

WN2 Calculation of amount of Rebate

Amount of Rebate = 25, 000 \times \frac{12}{100} \times \frac{1}{12} = Rs 250

WN3 Calculation of amount of Interest

Amount of Interest = 20, 120 \times \frac{15}{100} \times \frac{2}{12} = Rs 503

Question 43:

Harpal sold goods to Sompal for ₹ 12,000. Sompal accepted three bills of exchange, the first for ₹ 5,000 at one month, the second for ₹ 4,000 at two months and the third for ₹ 3,000 at three months. Harpal endorsed the first bill to Rajpal. The first bill was dishonoured. Rajpal paid ₹ 30 as noting charges. Harpal charged ₹ 200 for interest and drew on Sompal a fourth bill for ₹ 5,230. The second bill was also dishonoured, noting charges paid being ₹ 25. Harpal charged ₹ 150 as interest and accepted ₹ 2,175 in cash and drew a fifth bill for ₹ 2,000. The bill was paid on due date. The third and fourth bills were also met.
Pass Journal entries in the books of Harpal and prepare Sompal's Account in Harpal's Ledger.

Answer:

Books of Harpal Journal
Date	Particulars		L.F.	Debit Amount (Rs)	Credit Amount (Rs)
	Sompal	Dr.		12,000
	To Sales A/c				12,000
	(Goods sold to Sompal)

	Bills Receivable A/c (1)	Dr.		5,000
	Bills Receivable A/c (2)	Dr.		4,000
	Bills Receivable A/c (3)	Dr.		3,000
	To Sompal				12,000
	(Sompal accepted the bills)

	Rajpal	Dr.		5,000
	To Bills Receivable A/c (1)				5,000
	(Bill endorsed in favour of Rajpal)

	Sompal	Dr.		5,030
	To Rajpal				5,030
	(Bill dishonoured on due date and noting charges paid by Rajpal)

	Sompal	Dr.		200
	To Interest A/c				200
	(Interest due to be received)

	Bills Receivable A/c (4)	Dr.		5,230
	To Sompal				5,230
	(Sompal accepted the new bill)

	Sompal	Dr.		4,025
	To Bills Receivable A/c (2)				4,000
	To Cash A/c				25
	(Bill dishonoured on due date and noting charges paid)

	Sompal	Dr.		150
	To Interest A/c				150
	(Interest due to be received)

	Cash A/c	Dr.		2,175
	Bills Receivable A/c (5)	Dr.		2,000
	To Sompal				4,175
	(Rs 2,175 received in cash and a new bill for Rs 2,000 has been accepted by Sompal)

	Cash A/c	Dr.		3,000
	To Bills Receivable A/c (3)				3,000
	(Bill honoured on due date)

	Cash A/c	Dr.		5,230
	To Bills Receivable A/c (4)				5,230
	(Bill honoured on due date)

	Cash A/c	Dr.		2,000
	To Bills Receivable A/c (5)				2,000
	(Bill honoured on due date)

Sompal’s Account
Dr.								Cr.
Date	Particulars	J.F.	Amount (Rs)	Date	Particulars	J.F.	Amount (Rs)
	Sales A/c		12,000		Bills Receivable A/c (1)		5,000
	Rajpal		5,030		Bills Receivable A/c (2)		4,000
	Interest A/c		200		Bills Receivable A/c (3)		3,000
	Bills Receivable A/c (2)		4,000		Bills Receivable A/c (4)		5,230
	Cash A/c		25		Cash A/c		2,175
	Interest A/c		150		Bills Receivable A/c (5)		2,000
			21,405				21,405

Question 44(A):

Journalise the following in the books of Hari.
Sohan informs Hari that Mohan's acceptance for ₹ 13,000, endorsed in favour of Sohan by Hari, has been dishonoured. Sohan agrees to accept ₹ 3,000 in cash and an acceptance at 3 months together with interest @ 12% per annum.

Answer:

Journal in the books of Hari
Date	Particulars		L.F.	Debit Amount (₹)	Credit Amount (₹)
	Mohan’s A/c	Dr.		13,000
	To Sohan’s A/c				13,000
	(Bill dishonoured)

	Sohan’s A/c	Dr.		3,000
	To Cash A/c				3,000
	(Cash paid)

	Interest A/c	Dr.		300
	To Sohan’s A/c				300
	(Interest due on Rs 10,000 @ 12% for 3 months)

	Sohan’s A/c	Dr.		10,300
	To Bills Payable A/c				10,300
	(New bill accepted)

Question 44(B):

Journalise the following in the books of Harish.
Harish sends Hari's acceptance for ₹ 26,000 to Babu to meet his acceptance for the like amount in favour of Babu.

Answer:

Journal in the books of Harish
Date	Particulars		L.F.	Debit Amount (₹)	Credit Amount (₹)
	Bills Payable A/c	Dr.		26,000
	To Bills Receivable A/c				26,000
	(Babu’s bill sent for settling own acceptance)

Question 45:

Journalise the following transactions in our books:
(a) Our acceptance to Karan for ₹ 4,500 renewed for 3 months on the condition that ₹ 2,500 is paid in cash immediately and a new bill to be drawn including interest @ 12% p.a.
(b) A bill payable accepted in favour of Hari for ₹ 4,000 returned unpaid due to lack of instructions to the bank. Hari claims ₹ 4,050. (₹ 50 as noting charges), which is paid by cheque.

Answer:

Journal
Date	Particulars		L.F.	Debit Amount (₹)	Credit Amount (₹)
(a)	B/P A/c	Dr.		4,500
	To Karan				4,500
	(bill cancelled)

	Interest allowed A/c	Dr.		60
	To Karan				60
	(interest payable for 3 months)

	Karan	Dr.		4,560
	To Cash A/c				2,500
	To B/P A/c				2,060
	(cash and new acceptance given to Karan)

(b)	B/P A /c	Dr.		4,000
	Noting charges A/c	Dr.		50
	To Hari				4,050
	(B/P dishonoured)

	Hari	Dr.		4,050
	To Bank A/c				4,050
	(Hari’s account being settled)

Question 46:

Mehak sold goods for ₹ 24,000 to Shally on July 31, 2017 and drew three bills for ₹ 6,000, ₹ 8,000 and ₹ 10,000 payable after two, three and four months respectively. The first bill was kept by Mehak with her till maturity date. She endorsed the second bill in favour of her creditor Kanak. The third bill was discounted on September 3, 2017 @ 12% p.a. from bank. The first and second bill were duly met on maturity but the third bill was dishonoured and the bank paid ₹ 150 as noting charges. On December 3, 2017 Shally paid ₹ 5,000 and noting charges in cash and accepted a new bill at two months after date for the balance amount plus interest ₹ 200. The new bill was met on maturity by Shally.
You are required to give the Journal Entries in the books of Mehak.

Answer:

Journal
Date	Particulars		L.F.	Debit Amount (₹)	Credit Amount (₹)
2017
July 31	Shally	Dr.		24,000
	To Sales A/c				24,000
	(goods sold to Shally)

July 31	Bill Receivable A/c (I)	Dr.		6,000
	Bill Receivable A/c (II)	Dr.		8,000
	Bill Receivable A/c (III)	Dr.		10,000
	To Shally				24,000
	(bills drawn on Shally)

July 31	Kanak A/c	Dr.		8,000
	To Bill Receivable A/c (II)				8,000
	(bill endorsed to Kanak)

Sept 03	Bank A/c	Dr.		9,700
	Discount charges A/c	Dr.		300
	To Bill Receivable A/c (III)				10,000
	(bill discounted by bank)

Oct 03	Bank A/c	Dr.		6,000
	To Bill Receivable A/c (I)				6,000
	(bill-I matured)

Dec 03	Shally	Dr.		150
	To Bank A/c				150
	(noting charges paid by bank)

Dec 03	Shally	Dr.		200
	To Interest A/c				200
	(Interest due)

Dec 03	Cash A/c	Dr.		5,000
	To Shally				5,000
	(part payment by Shally)

Dec 03	Bill Receivable A/c (IV)	Dr.		5,200
	To Shally				5,200
	(new bill drawn on Shally)

2018	Bank A/c	Dr.		5,200
Feb 07	To Bill Receivable A/c (IV)				5,200
	(bill matured)

Accountancy Dk Goel 2019 for Class 11 Commerce Accountancy Chapter 11 - Bills Of Exchange

Page No 18.57:

Question 1:

Answer:

Page No 18.57:

Question 2:

Answer:

Page No 18.58:

Question 3:

Answer:

Page No 18.58:

Question 4:

Answer:

Page No 18.58:

Question 5:

Answer:

Page No 18.58:

Question 6(A):

Answer:

Page No 18.58:

Question 6(B):

Answer:

Page No 18.58:

Question 7:

Answer:

Page No 18.58:

Question 8:

Answer:

Page No 18.59:

Question 9:

Answer:

Page No 18.59:

Question 10:

Answer:

Page No 18.59:

Question 11:

Answer:

Page No 18.59:

Question 12:

Answer:

Page No 18.59:

Question 13:

Answer:

Page No 18.60:

Question 14(A):

Answer:

Page No 18.60:

Question 14(B):

Answer:

Page No 18.60:

Question 15:

Answer:

Page No 18.60:

Question 16:

Answer:

Page No 18.60:

Question 17:

Answer:

Page No 18.61:

Question 18:

Answer:

Page No 18.61:

Question 19:

Answer:

Page No 18.61:

Question 20:

Answer:

Page No 18.61:

Question 21(A):

Answer:

Page No 18.61:

Question 21(B):

Answer:

Page No 18.61:

Question 22:

Answer:

Page No 18.62:

Question 23:

Answer:

Page No 18.62: