Question No 08 Chapter No 13

Sending the Bill to Bank for Collection

08. On January 1,2018 Ajay sold goods to Balbir for Rs 10,000 at a discount of 20%. On that date, Balbir acceptance a bill drawn on him by Ajay for Rs 8,000 payable 3 months after Sight. Having surplus funds, Balbir paid off the bill on 4th March 2018 and was allowed a rebate of 18% per annum. Show journal entries in the books of Ajay and Balbir.

## The solution of Question No 08 Chapter No 13: –

 In the books of Ajay (Drawer) Date Particulars L.F. Debit Credit 2019 Jan.01 Balbir A/c Dr. 8,000 Discount A/c Dr. 2,000 To Y A/c 10,000 (Being Goods sold to Balbir) Jan.01 Sent for Collection A/c Dr. 8,000 To Balbir A/c 8,000 (Being Bill accepted by Balbir) Mar.04 Cash A/c Dr. 7,880 Rebate A/c Dr. 120 To Bills Receivable A/c 8,000 (Being Bills sent to bank for Discount)
 In the books of Balbir (Drawee) Date Particulars L.F. Debit Credit 2019 Jan. 01 Purchases A/c Dr. 4,000 To Ajay A/c 4,000 (Being Goods purchased from Ajay) Jan. 01 Ajay A/c Dr. 4,000 To Bills Payable A/c 4,000 (Being 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 (Being Bill retired under there bate of @18)

Working Note: –

Calculation of Discounting Charges

 Amount of Rebate = 8,000 x 18 X 1 100 12 = Rs 120

Bills Payable Book | Subsidiary Books | Examples

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