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Question No 42 Chapter No 15
Renewal of Bill
42.Suresh owed money to Brijesh and hence accepted two bills each for Rs 5,000 for the three months duration drawn on him by the latter on January 1,2019. Brijesh discounted one of the bills with the bank for the net proceeds of Rs 4,800 and endorsed the other in the favor of Mukesh to whom he owed the like amount on the same date. Suresh paid the bill held by Mukesh on the due date but failed to meet the bill presented by the bank debited Brijesh’s account on April 4,2019 inclusive of bank charges of Rs 50. Suresh paid the amount inclusive of Charges to Brijesh on April 10,2019
Show journal entries in respect of the above in the book of Suresh and Brijesh
In the book of Brijesh (Drawee)
| Date | Particulars |
L.F. | Debit | Credit | |
|---|---|---|---|---|---|
| 2018 | |||||
| Jan.1 | Bill Receivable A/c | Dr. | 10,000 | ||
| To Suresh A/c | 10,000 | ||||
| (Being receipt of two acceptance of Rs 5,000 each in settlement of amount due.) | |||||
| Jan.1 | Bank A/c | Dr. | 4,800 | ||
| Discount A/c | Dr. | 200 | |||
| To Bill Receivable A/c | 5,000 | ||||
| (Being the amount receivable on discounting of the first bill.) | |||||
| Jan.1 | Mukesh A/c | Dr. | 5,000 | ||
| To Bills Receivable A/c | 5,000 | ||||
| (Being bill endorsed to Mukesh.) | |||||
| Apr.4 | Suresh A/c | Dr. | 5,050 | ||
| To Bank A/c | 5,050 | ||||
| (Being dishonor of the discounted bill nothing charges paid .) | |||||
| Apr.10 | Cash A/c | Dr. | 5,050 | ||
| To Suresh A/c | 5,050 | ||||
| (Being amount received in Settlement of debt.) | |||||
In the book of Suresh (Drawer)
| Date | Particulars |
L.F. | Debit | Credit | |
|---|---|---|---|---|---|
| 2018 | |||||
| Jan.1 | Brijesh A/c | Dr. | 10,000 | ||
| To Bill Payable A/c | 10,000 | ||||
| (Being acceptance of two bill of Rs 5,000 each .) | |||||
| Apr.4 | Bill Payable A/c | Dr. | 5,000 | ||
| To Cash A/c | 5,000 | ||||
| (Being receipt of an acceptance for one month.) | |||||
| Apr.4 | Bill Payable A/c | Dr. | 5,000 | ||
| Noting Charges A/c | Dr. | 50 | |||
| To Brijesh A/c | 5,050 | ||||
| (Being dishonour of bill presented by a bank on the due date.) | |||||
| Apr.10 | Brijesh A/c | Dr. | 5510 | ||
| To Cash A/c | 5510 | ||||
| (Being amount paid in Settlement of debt.) | |||||
https://tutorstips.com/bills-receivable/
https://tutorstips.com/bills-payable/
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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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