Question No 20 Chapter No 13

Question No 20 Chapter No 13

Three Bills of Exchange

20. A sold goods to B on 30th October, 2016 for Rs 14,000 and received three bills for Rs 2,000, Rs 4,000 and Rs 8,000 at 2,3 months duration respectively. He kept the first bill till Maturity; endorsed 2nd bill in favour of his creditor C and discounted the third bill on 3rd December, 2016 @18% p.a. the first and 2nd bills were duly met on maturity but the third bill was dishonoured, the bank paying Rs 40 as noting charges. On 3rd March 2017 B paid Rs 3,000 and noting charges in cash and accepted a new bill at 3 months after date for the balance plus Rs 150 as interest. The new bill was met on maturity. Give journal entries in the books of A and B both.

The solution of Question No 20 Chapter No 13: –

In the books of A
Date  Particulars
L.F.DebitCredit
2018     
Oct.30B A/cDr. 14,000 
 To Sale A/c   14,000
 (Being Sold goods to B)    
      
Oct.30Bill Receivable A/c (i)Dr. 2,000 
 Bill Receivable A/c (ii)Dr. 4,000 
 Bill Receivable A/c (iii)Dr. 8,000 
 To B A/c   14,000
 (Being three bills drew on B and acceptance received from him.)    
      
Oct.30C A/cDr. 4,000 
 To Bill Receivable A/c (ii)   4,000
 (Being bill endorsed to C )    
      
Dec.3Bank A/cDr. 7,760 
 Discount A/cDr. 240 
 To Bill Receivable A/c   8,000
 (Being third bill was discounted by A)    
      
Jan.2Cash A/cDr. 2,000 
 To Bill Receivable A/c (i)   2,000
 (Being bill received on maturity)    
      
Feb.3Bill Receivable A/cDr. 8,000 
 Noting Charges A/cDr. 40 
 To noting Charges A/c   8,040
 (Being third bill was dishonoured )    
      
Feb.3Cash A/cDr. 3,040 
 To Noting Charges A/c   3,000
 To B A/c   40
 (Being third bill was dishonoured )    
      
Feb.3B A/cDr. 150 
 To Interest A/c   150
 (Being charged interest on B)    
      
Feb.3Bill Receivable A/c (iv)Dr. 5,150 
 To B A/c   5,150
 (Being new bill drawn on harish )    
      
Apr.7Cash A/cDr. 5,150 
 To Bill Receivable A/c (iv)   5,150
 (Being bill was mat on maturity)    
     
In the books of B
Date  Particulars
L.F.DebitCredit
2018     
Oct.30Purchases A/cDr. 14,000 
 To A A/c   14,000
 (Being purchases goods from A)    
      
Oct.30A A/cDr. 14,000 
 To Bill Payable A/c (i)   2,000
 To Bill Payable A/c (ii)   4,000
 To Bill Payable A/c (iii)   8,000
 (Being three bills drew by Satish acceptance by us.)    
      
Jan.2Bill Payable A/c (i)Dr. 2,000 
 To Cash A/c   2,000
 (Being first bill payable paid on maturity)    
      
Feb.02Bill Payable A/c(ii)Dr. 4,000 
 To Satish A/c   4,000
 (Being Bill dishonoured)    
      
Mar.04Bill Payable A/c (iii)Dr. 8,000 
 A A/c   8,000
 (Being third bill was dishonoured )    
      
Mar.04A  A/c (iii)Dr. 3,000 
 Noting Charges A/cDr. 40 
 To Cash A/c   3,040
 (Being Cash paid and noting charges paid to A)    
      
Mar.04A  A/cDr. 5,150 
 To Bill Payable A/c (iii)   5,150
 (Being bill paid on maturity)    
      
Mar.04Bill Payable A/c (iv)Dr. 5,150 
 To Cash A/c   5,150
 (The being bill was a mat on maturity)    
     

Working Note: –

Calculation of Discounting Charges

Discounting Charges=8,00018X2
10012
       
 =Rs 240    

Bills Payable Book | Subsidiary Books | Examples

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D K Goel – New ISC Accountancy -(Class 11 – ICSE)- Solution

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