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Question No 31 Chapter No 15
Dishonour of Bill
31. As receives three bills from B date 1st January 2018 for Rs 1,000 each payable after one month, two months and three months respectively. He endorses a bill payable after one month to C in the full and final settlement of C’s claim for Rs 1,040. bill payable after two months is discounted with the bank for Rs 950. bill payable after three months is sent to the bank for collection.
Pass journal entries in the book of A, Assuming:
(i)Bill are paid on Maturity; and (ii)Bill are dishonoured and noting charges amounted to Rs 50
(i) Bill are paid on Maturity
(a) No entry is passed in the book of A on maturity if the bill is endorsed to C
(b) No entry is passed in the book in the books of A on maturity if the bill is discounted with the bank
| Date | Particulars |
L.F. | Debit | Credit | |
|---|---|---|---|---|---|
| (c) | |||||
| Bank A/c | Dr. | 1,000 | |||
| To Bank for collection A/c | 1,000 | ||||
| (Being the amount received by the bank on a collection of bill.) | |||||
(ii) Bill is dishonoured and noting charges amounted to Rs 50
| Date | Particulars |
L.F. | Debit | Credit | |
|---|---|---|---|---|---|
| (a) | B A/c | Dr. | 1,050 | ||
| To C A/c | 1,050 | ||||
| (Being dishonour of bill endorsed to C. nothing charges Rs 50 paid by him.) | |||||
| (b) | B A/c | Dr. | 1,050 | ||
| To Bank A/c | 1,050 | ||||
| (Being dishonour of bill discounted with the bank, nothing charges Rs 50 paid by the bank) | |||||
| (c) | B A/c | Dr. | 1,050 | ||
| To Bank for collection A/c | 1,000 | ||||
| To Bank A/c | 50 | ||||
| (Being dishonoured of a bill sent to the bank for collection. Noting charges Rs 50 paid by the bank ) | |||||
In the books of Mahesh(endorsee)
| Date | Particulars |
L.F. | Debit | Credit | |
|---|---|---|---|---|---|
| 2018 | |||||
| Jan.1 | Bill receivable A/c | Dr. | 3,100 | ||
| To Ganesh A/c | 3,100 | ||||
| (Being the receipts of an acceptance) | |||||
| Jan.1 | Bank A/c | Dr. | 3,038 | ||
| Discount A/c | Dr. | 62 | |||
| To Bills receivable A/c | 3,100 | ||||
| (Being the bill discounted with bank) | |||||
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Also, Check out the solved question of all Chapters: –
Chapter No. 2 - Theory Base of Accounting
Chapter No. 3 - Origin of Transactions
Chapter No. 4 - Vouchers and transactions
Chapter No. 6 - Accounting for Goods and Services Tax(GST)
Chapter No. 9 - Other Subsidiary Books
Chapter No. 10 - Journal Proper
Chapter No. 11 - Trial Balance
Chapter No. 12 - Bank Reconciliation Statement
Chapter No. 14 - Provisions and Reserves
Chapter No. 15 - Bills of Exchange
Chapter No. 16 - Rectification of Errors
Chapter No. 17 - Financial Statements - (Without Adjustments)
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.
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