Question No 20 Chapter No 13 – D.K Goal 11 Class

Question No 20 Chapter No 13

Question No 20 Chapter No 13

Free Accounting book Solution - Class 11 and Class 12

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. Debit Credit
2018          
Oct.30 B A/c Dr.   14,000  
  To Sale A/c       14,000
  (Being Sold goods to B)        
           
Oct.30 Bill 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.30 C A/c Dr.   4,000  
  To Bill Receivable A/c (ii)       4,000
  (Being bill endorsed to C )        
           
Dec.3 Bank A/c Dr.   7,760  
  Discount A/c Dr.   240  
  To Bill Receivable A/c       8,000
  (Being third bill was discounted by A)        
           
Jan.2 Cash A/c Dr.   2,000  
  To Bill Receivable A/c (i)       2,000
  (Being bill received on maturity)        
           
Feb.3 Bill Receivable A/c Dr.   8,000  
  Noting Charges A/c Dr.   40  
  To noting Charges A/c       8,040
  (Being third bill was dishonoured )        
           
Feb.3 Cash A/c Dr.   3,040  
  To Noting Charges A/c       3,000
  To B A/c       40
  (Being third bill was dishonoured )        
           
Feb.3 B A/c Dr.   150  
  To Interest A/c       150
  (Being charged interest on B)        
           
Feb.3 Bill Receivable A/c (iv) Dr.   5,150  
  To B A/c       5,150
  (Being new bill drawn on harish )        
           
Apr.7 Cash A/c Dr.   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. Debit Credit
2018          
Oct.30 Purchases A/c Dr.   14,000  
  To A A/c       14,000
  (Being purchases goods from A)        
           
Oct.30 A A/c Dr.   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.2 Bill Payable A/c (i) Dr.   2,000  
  To Cash A/c       2,000
  (Being first bill payable paid on maturity)        
           
Feb.02 Bill Payable A/c(ii) Dr.   4,000  
  To Satish A/c       4,000
  (Being Bill dishonoured)        
           
Mar.04 Bill Payable A/c (iii) Dr.   8,000  
  A A/c       8,000
  (Being third bill was dishonoured )        
           
Mar.04 A  A/c (iii) Dr.   3,000  
  Noting Charges A/c Dr.   40  
  To Cash A/c       3,040
  (Being Cash paid and noting charges paid to A)        
           
Mar.04 A  A/c Dr.   5,150  
  To Bill Payable A/c (iii)       5,150
  (Being bill paid on maturity)        
           
Mar.04 Bill 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 = 8,000 18 X 2
100 12
             
  = Rs 240        

Bills Payable Book | Subsidiary Books | Examples

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2 thoughts on “Question No 20 Chapter No 13 – D.K Goal 11 Class”

    1. No, it is correct.
      Because the bill got discounted on 3 Dec 2016 and the maturity date of the bill is 3 Feb 2016.
      So only 2 months left only for maturity that’s why interest will be charged on 2 months period rather than 3 months.

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