Question No 27 Chapter No 16 - T.S. Grewal 11 Class

Question No 27 Chapter No 16

27. On 1st January 2018, X received from Y three Bills of Exchange for 6,000; 8,000; and 10,000 for 6 months, 4 months and 3 months respectively. On 3rd January the first bill was discounted by X with his bankers at a discount of 5% p.a. On 1st February the 3rd bill was endorsed in favour of a creditor Z. The second bill was retained until the due date. On due dates, all the three bills were dishonoured. Show the necessary Journal entries in the books of X and Y.

The solution of Question No 27 Chapter No 16:-

Books of X
Date	Particulars		L.F.	Debit	Credit
2018
Jan.01	Bills Receivable A/c Billno1	Dr.		6,000
	Bills Receivable A/c Billno2	Dr.		8,000
	Bills Receivable A/c Billno3	Dr.		10,000
	To Y A/c				24,000
	(Being Y′s acceptance was received)
Jan.03	Bank A/c	Dr.		5,850
	Discount Charges A/c	Dr.		150
	To Y A/c				6,000
	(Being Billno1 validity for 6months was discounted with the bank at 5%)
Feb.01	Z A/c	Dr.		10,000
	To Bills Receivable A/c Billno3				10,000
	(Being Bill discounted )
Apr.04	Y A/c	Dr.		10,000
	To Z A/c				10,000
	(Being Billno3 validity for 3months was dishonoured on due date)
May 04	Y A/c	Dr.		8,000
	To Bills Receivable A/c Billno2				8,000
	(Being Billno2 validity for 4 months was dishonoured on due date)
July 04	Y A/c	Dr.		6,000
	To Bank A/c				6,000
	(Being Billno1 validity for 6 months was dishonoured on due date)

Books of Y
Date	Particulars		L.F.	Debit	Credit
2018
Jan.01	X A/c	Dr.		24,000
	To Bills Payable A/c Billno1				6,000
	To Bills Payable A/c Billno2				8,000
	To Bills Payable A/c Billno3				10,000
	(Being Three bill drawn by X were accepted)
Apr. 04	Bills Payable A/c Billno3	Dr.		10,000
	To X A/c				10,000
	(Being Billno3 was no honoured)
May 04	Bills Payable A/c Billno2	Dr.		8,000
	To X				8,000
	(Being Billno2 was no honoured)
July 04	Bills Payable A/c Billno1	Dr.		6,000
	To X A/c				6,000
	(Being Billno3 was no honoured)

Bill of exchange (BOE): Meaning and Examples

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

- 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