Question No 26 Chapter No 16 - T.S. Grewal 11 Class

Question No 26 Chapter No 16

26. X sells goods for 40,000 to Y on 1st January 2012 and on the same day draws a bill on Y at three months for the amount. Y accepts it and returns it to X, who discounted it on 4th January 2018 with his bank at 6% p.a. The acceptance is dishonoured on the due date and the noting charges were paid by the bank is 200. On 4th April 2018, Y accepts a new bill at three months for the amount then due to X together with interest at 12% p.a. Make Journal entries to record these transactions in the books of X.

The solution of Question No 26 Chapter No 16: –

Books of A
Date	Particulars		L.F.	Debit	Credit
2012
Jan.01	Y A/c	Dr.		40,000
	To Sales A/c				40,000
	(Being Good sold to Y)
Jan.01	Bills Receivable A/c	Dr.		40,000
	To Y A/c				40,000
	(Being B′s acceptance received and discount allowed)
Jan.04	Bank A/c	Dr.		39,400
	Discounting Charges A/c	Dr.		600
	To Bills Receivable A/c				40,000
	(Being Bill discounted )
Apr.04	Y A/c *	Dr.		40,200
	To Bank A/c				40,200
	(Being Bill dishonoured and noting charges of Rs 200 paid by the bank)
Apr.04	Y A/c **	Dr.		1,206
	To Bank A/c				1,206
	(Being Interest due for three months from Nonrenewal of the bill)
Apr.04	Bills Receivable New A/c	Dr.		41,406
	To Y A/c				41,406
	(Being Acceptance received from Y`)

Working Notes:

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Calculation of Discount charges	=	Bills receivable	X	Rate	X	Period of Maturity
				100		12

40,000	X	6	X	3
		100		12

= Rs 200

40,.200	X	12	X	3
		100		12

= Rs 1,206

Bill of exchange (BOE): Meaning and Examples

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- Chapter No. 1 – Introduction to Accounting
- Chapter No. 2 – Basic Accounting Terms
- Chapter No. 3 – Theory Base of Accounting, Accounting Standards and International Financial Reporting Standards(IFRS)
- Chapter No. 4 – Bases of Accounting
- Chapter No. 5 – Accounting Equation
- Chapter No. 6 – Accounting Procedures – Rules of Debit and Credit
- Goods and Services Tax(GST)
- Chapter No. 7 – Origin of Transactions – Source Documents and Preparation of Vouchers
- Chapter No. 8 – Journal
- Chapter No. 9 – Ledger
- Chapter No. 10 – Special Purpose Books I – Cash Book
- Chapter No. 11 – Special Purpose Books II – Other Books
- Chapter No. 12 – Bank Reconciliation Statement
- Chapter No. 13 – Trial Balance
- Chapter No. 14 – Depreciation
- Chapter No. 15 – Provisions and Reserves
- Chapter No. 16 – Accounting for Bills of Exchange
- Chapter No. 17 – Rectification of Errors
- Chapter No. 18 – Financial Statements of Sole Proprietorship
- Chapter No. 19 – Adjustments in preparation of Financial Statements
- Chapter No. 20 – Accounts from incomplete Records – Single Entry System
- Chapter No. 21 – Computers in Accounting
- Chapter No. 22 – Accounting Software – Tally
- Chapter No. 5 – Accounting Equation
- Chapter No. 6 – Accounting Procedures – Rules of Debit and Credit
- Goods and Services Tax(GST)
- Chapter No. 8 – Journal
- Chapter No. 9 – Ledger
- Chapter No. 10 – Special Purpose Books I – Cash Book