Question No 29 Chapter No 16 - T.S. Grewal 11 Class

Question No 29 Chapter No 16

29. Ram owes 2,000 to Mohan on 1st January 2018. On this date, he accepted a draft for the amount for 3 months. Mohan got the bill discounted at his bank @ 6% p.a. On the due date, the bill was dishonoured, nothing charges 20. Ram agreed to pay 520 immediately and accept another bill for the remaining amount for 3 months together with interest at 9% p.a. This bill was met on the due Tate. Give the Journal entries in the books of both the parties.

The solution of Question No 29 Chapter No 16:-

Books of Mohan
Date	Particulars		L.F.	Debit	Credit
2018
Jan.01	Bills Receivable A/c	Dr.		2,000
	To Ram				2,000
	(Being Ram′s acceptance received)
Jan.01	Bank A/c	Dr.		1,970
	Discount Charges A/c	Dr.		30
	To Bills Receivable A/c				2,000
	(Being Y′s acceptance was received)
Apr.04	Ram A/c	Dr.		2,020
	To Bank				2,020
	(Being Ram′s acceptance which was discounted with bank dishonoured)
Apr.04	Cash A/c	Dr.		520
	To Ram				520
	(Being Cash received from Ram)
Apr.04	Ram	Dr.		34
	To Interest A/c				34
	(Being Interest due from on amount outstanding at 9%)
	Working Note: Interest = 1,500 × 9% × 3/12 = Rs 34
Apr.04	Bill Receivable A/c	Dr.		1,534
	To Ram				1,534
	(Being Ram ′acceptance received for an outstanding amount including interest)
Apr.04	Cash A/c	Dr.		2,020
	To Bills Receivable A/c				2,020
	(Being Cash received on honouring of the bill)

Books of Ram
Date	Particulars		L.F.	Debit	Credit
2018
Jan.01	Mohan	Dr.		2,000
	To Bills Payable A/c				2,000
	(Being goods were bought from X)
Apr.04	Bills Payable A/c	Dr.		2,000
	Noting Charges A/c	Dr.		20
	To Mohan				2,020
	(Being Bill dishonoured on its due date)
Apr.04	Mohan	Dr.		520
	To Cash A/c				520
	(Being Cash paid to Mohan)
Apr.04	Interest A/c	Dr.		34
	To Mohan				34
	(Being Interest due to Mohan on the outstanding balance for 3months)
Apr.04	Bills Payable A/c	Dr.		1,534
	To Cash A/c				1,534
	(Being Bill discharged on maturity)

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