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✦ FREE LEARNING — CLASS 11 & 12 — CBSE · PSEB — ACCOUNTS · ECONOMICS · BST ✦
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20. Ram owes ₹ 2,000 to Mohan on 1st January 2020. On this date, he accepted a draft for the amount for 3 months. Mohan got the bill discounted at his bank @ 6%. On the due date, the bill was dishonored noting charges ₹ 20. Ram agreed to pay ₹ 520 immediately and accept another bill for the remaining amount for 3 months together with interest at 9% p.a. this bill was met on the due date. Give journal entries in the books of the parties.
Journal for Mr. ‘Mohan’ (Drawer)
| Date | Particulars |
L.F. | Debit | Credit | |
|---|---|---|---|---|---|
| 2020 | |||||
| Jan. 1 | Bill Receivable A/c | Dr. | 2,000 | ||
| To Ram’s A/c | 2,000 | ||||
| (Being the bill 3 months drawn and accepted) | |||||
| Jan. 1 | Bank A/c | Dr. | 1,970 | ||
| Discount A/c | Dr. | 30 | |||
| To Bank A/c | 2,000 | ||||
| (Being the bill discounted @ 6% p.a.) | |||||
| Apr. 4 | Ram’s A/c | Dr. | 2,020 | ||
| To Bill payable A/c | 2,000 | ||||
| To Cash A/c | |||||
| (Being the bill dishonoured and ₹ 20 paid as noting charges) | |||||
| Apr. 4 | Cash A/c | Dr. | 520 | ||
| To Ram A/c | 520 | ||||
| (Being cash received from Mr. Ram) | |||||
| Apr. 4 | Bill receivable A/c | 1,534 | |||
| To Ram’s A/c | 1,500 | ||||
| To Interest A/c | 34 | ||||
| (Being a new bill for 3 months with interest @ 9% p.a. drawn and accepted) | |||||
| July 7 | Cash A/c | Dr. | 1,534 | ||
| To Bill receivable A/c | 1,534 | ||||
| (Being the bill met on due date) | |||||
Journal for Mr. ‘Ram’ (Drawee)
| Date | Particulars |
L.F. | Debit | Credit | |
|---|---|---|---|---|---|
| 2020 | |||||
| Jan. 1 | Mohan A/c | Dr. | 2,000 | ||
| To Bill payable A/c | 2,000 | ||||
| (Being bill for 3 months accepted and returned) | |||||
| Apr.4 | Bill payable A/c | Dr. | 2,000 | ||
| Nothing charges A/c | Dr. | 20 | |||
| To Mohan A/c | 2,020 | ||||
| (Being the bill dishonoured on due date) | |||||
| Apr.4 | Mohan A/c | Dr. | 520 | ||
| To Cash A/c | 520 | ||||
| (Being cash paid to Mohan) | |||||
| Apr.4 | Mohan A/c | Dr. | 1,500 | ||
| Interest A/c | Dr. | 34 | |||
| To Bill receivable A/c | 1,534 | ||||
| (Being a new bill for 3 months with interest @ 9% p.a. accepted and returned) | |||||
| July 7 | Bills payable A/c | Dr. | 1,534 | ||
| To Cash A/c | 1,534 | ||||
| (Being own acceptance met on due date) | |||||
Accounting & Commerce Educator
Sarbjit Singh holds a B.Com and M.Com degree and has over 12 years of teaching experience in double entry bookkeeping, financial accounting, and business studies.
This guide covers "Question 20 Chapter 14 – Class 11 Unimax", focusing on key definitions, step-by-step concepts, applications, and revision guidelines relevant to Chapter 14 - Bills of Exchange - Unimax.
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