Question No 22 Chapter No 13

Question No 22 Chapter No 13

Insolvency of the Acceptor

22. A sells goods for Rs 8,000 to B on Jan 1, 2017 and on the same date draws a bill for 3 months on the latter for the amount. B accepts it and retunes it to A, who discounts it with his banker for Rs 7,850. on the date, due date the bill is dishonoured. Noting charges of Rs 150 were paid by the bank. B then pays Rs 3,000 in cash and accepts a new bill at three months for Rs 5,350. Before maturity, B became insolvent and a final dividend of 50 paise in the Rs was received. Give journal entries to record this transaction in the books of A and B.

The solution of Question No 22 Chapter No 13: –

In the books of A
Date  Particulars
Jan.1B A/cDr. 8,000 
 To Sale A/c   8,000
 (Being goods sold to B.)    
Jan.1Bill Receivable A/cDr. 8,000 
 To B A/c   8,000
 (Being three bills drew on B and acceptance received from him.)    
Jan.1Bank A/cDr. 7,850 
 Discount A/cDr. 150 
 To Bill Receivable A/c   8,000
 (Being bill discounted from the bank)    
Apr.04Bill Receivable A/cDr. 8,000 
 Noting Charges A/cDr. 150 
 To Bank A/c   8,150
 (Being bill dishonoured and noting charges )    
Apr.04Cash A/cDr. 3,000 
 To B A/c   3,000
 (Being cash received from B)    
Apr.04Bill Receivable A/cDr. 5,350 
 To B A/c   5,350
 (Being the third bill was dishonoured )    
Apr.04Cash A/cDr. 3,264 
 Bad debts A/cDr. 4,896 
 To Bill Receivable A/c   5,350
 (Being the third bill was dishonoured )    
In the books of B
Date  Particulars
Jan.1Purchases A/cDr. 8,000 
 To A A/c   8,000
 (Being purchases goods from A)    
Jan.1A A/cDr. 8,000 
 To Bill Payable A/c   8,000
 (Being three bills drew by Satish acceptance by us.)    
Apr.04Bill Payable A/cDr. 8,000 
 To A A/c   8,000
 (Being cash paid to Amit)    
Apr.04A A/cDr. 3,000 
 To Cash A/c   3,000
 (Being cash paid to A)    
Apr.04A A/cDr. 5,350 
 To Bill Payable A/c   5,350
 (Being purchases goods from A.)    
Dec.07Bill Payable A/c (iii)Dr. 5,350 
 To Cash A/c   3,264
 To Deficiency A/c   4,896
 (Being bill dishonoured and paid 40% in cash )    

Bills Payable Book | Subsidiary Books | Examples

Also, Check out the solved question of all Chapters: –

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

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ISC Accounts 11 20 Image min 197x300 - Question No 22 Chapter No 13 - D.K Goal 11 Class
D K Goel accountancy +1 – ISC_Accounts_11_20_ImageQuestion No 42 Chapter No 11 – D.K Goal 11 Class

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