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Question No 37 Chapter No 15 - USHA Publication 11 Class

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Question No 37 Chapter No 15

Renewal of Bill

37. X owed Y Rs 6,000 on 1st January 2018. on the same sate, Y drew upon X a bill for the amount for two months and X returned the bill duly acceptance. Y got the bill discounted at his bank at 6%. Before the bill was due for the payment, X told Y that he was not able to pay the full amount and requested Y to accept Rs 2,000 immediately and draw upon him another bill for the remaining amount for two months together with interest at 12% per annum. Y agreed. The second bill was duly met
Give journal entries in the books of X and Y

The solution of Question No 37 Chapter No 15: -

In the book of X (Drawee)

Date	Particulars		Debit	Credit
2019
Jan.1	Y A/c	Dr.	6,000
	To Bill payable A/c			6,000
	(Being goods purchased on credit .)

Mar.4	Bill payable A/c	Dr.	6,000
	To Y A/c			6,000
	(Being cancellation of the old bill.)

Mar.4	Y A/c	Dr.	2,000
	To Cash A/c			2,000
	(Being cash paid .)

Mar.4	Interest A/c	Dr.	40
	To Y A/c			40
	(Being the amount of interest due to Y on Rs. 4,000 for 2 month @6%)

Mar.4	Y A/c		4,040
	To Bill Payable A/c			4,040
	(Being a new bill accewpted in favour of Y)

May.7	Bill Payable A/c	Dr.	4,040
	To Cash A/c			4,040
	(Being payment of the bill on maturity.)

In the book of Y (Drawer)

Date	Particulars		Debit	Credit
2019
Jan.1	Bill Receivable A/c	Dr.	6,000
	To X A/c			6,000
	(Being receipt of an acceptance.)

Jan.1	Bank A/c	Dr.	5,950
	Discount A/c	Dr.	50
	To Bill Receivable A/c			6,000
	(Being receipt of an acceptance for one months.)

Mar.4	X A/c	Dr.	6,000
	To Bank A/c			6,000
	(Being cancellation of the bill.)

Mar.4	Cash A/c	Dr.	2,000
	To X A/c			2,000
	(Being cash received from Amar.)

Mar.4	X A/c	Dr.	40
	To Interest A/c			40
	(Being receipt of the new bill for the amount with interest .)

Mar.4	Bill Receivable A/c		4,040
	To X A/c			4,040
	(Being the receipt of acceptance from X)

May.7	Cash A/c	Dr.	4,040
	To Bill Receivable A/c			4,040
	(Being the amount received on due date .)