DK Goel Accountancy Class 11 Solutions Chapter 18 Bills of Exchange which is outlined by expert Accountancy teachers from the latest version of DK Goel Class 11 Accountancy books. We at BYJUâ€™S provide DK Goel Solutions to assist students to comprehend all the theories in particular.
There are numerous concepts in Accountancy, but the concepts of Trial Balance, Depreciation and Bank Reconciliation Statement (BRS) are required.
DK Goel Accountancy Class 11 Solutions â€“ Chapter 18
Question 1
Date of bills 
Period 
1st February, 2017 
2 months 
31st January, 2017 
3 months 
30th September, 2017 
2 months 
30th September, 2017 
3 months 
29th December, 2017 
2 months 
31st December, 2017 
2 months 
15th July, 2017 
3 months 
27th January, 2016 
1 month 
Solution:
Sl. No. 
Date of Bill Drawn 
Period 
Grace Days 
Due Date = Date of Bill Drawn + Period + Grace Days 
I. 
February 01, 2017 
2 months 
3 days 
April 04, 2017 
II. 
January 31, 2017 
3 months 
3 days 
May 03, 2017 
III. 
September 30, 2017 
2 months 
3 days 
December 03, 2017 
IV. 
September 30, 2017 
3 months 
3 days 
January 02, 2018 
V. 
December 29, 2017 
2 months 
3 days 
March 03, 2018 
VI. 
December 31, 2017 
2 months 
3 days 
March 03, 2018 
VII. 
July 15, 2017 
30 days 
3 days 
August 17, 2017 
VIII. 
January 27, 2016 
1 month 
3 days 
March 01, 2016 
Question 2
Date of bills 
Period 
29th May, 2017 
4 months 
31st March, 2017 
1 month 
21st July, 2017 
60 days 
14th May, 2017 
90 days 
28th January, 2017 
1 month 
31st January, 2017 
1 month 
Solution:
Sl. No. 
Date of Bill Drawn 
Period 
Grace Days 
Due Date = Date of Bill Drawn + Period + Grace Days 
I. 
May 29, 2017 
4 months 
3 days 
October 01, 2017 
II. 
March 31, 2017 
1 month 
3 days 
May 03, 2017 
III. 
July 21, 2017 
60 days 
3 days 
September 23, 2017 
IV. 
May 14, 2017 
90 days 
3 days 
August 14, 2017 
V. 
January 28, 2016 
1 month 
3 days 
March 02, 2016 
VI. 
January 31, 2016 
1 month 
3 days 
March 03, 2016 
Note:
(i) Whenever the due date is on public holiday then the due date will be the previous day. (In this bill the public holiday is on October 2, 2017 and August 15, 2017),
(ii) In emergency holiday then the due date is succeeding or the next following day. (here September 22, 2017), e.
Question 3
On 1st January, 2017, Ajay sold goods to Bhushan for â‚¹ 10,000. Ajay draws a bill of exchange for two months for the amount due which Bhushan accepts and returns it to Ajay, Bhushan met the bill on the due date. Pass Journal entries in the books of Ajay and Bhushan.
Solution:
Journal Books of Ajay 

Date 
Particulars 
L.F. 
Debit â‚¹ 
Credit â‚¹ 

2017 

January 1 
Bhushan 
Dr. 
10,000 

To Sales A/c (Sold goods to Bhushan) 
10,000 

January 1 
Bills Receivable A/c 
Dr. 
10,000 

To Bhushan (Bill accepted by Bhushan) 
10,000 

March 4 
Cash A/c 
Dr. 
10,000 

To Bills Receivable A/c (Bill honoured on maturity) 
10,000 
Books of Bhushan Journal 

Date 
Particulars 
L.F. 
Debit â‚¹ 
Credit â‚¹ 

2017 

January 1 
Purchases A/c 
Dr. 
10,000 

To Ajay (Goods bought from Ajay) 
10,000 

January 1 
Ajay 
Dr. 
10,000 

To Bills Payable A/c (Bill drawn by Ajay, accepted) 
10,000 

March 4 
Bills Payable A/c 
Dr. 
10,000 

To Cash A/c (Bill honoured on maturity) 
10,000 
Question 4
On Jan. 1,2017, Tarun purchased goods from Arun for â‚¹ 20,000 and immediately drew a promissory note in favour of Arun payable after 1 month. Date of maturity of the promissory note was declared emergency holiday by the Government of India under the Negotiable Instrument Act 1881. Tarun met the promissory note according to the provisions of law.
Pass the necessary Journal entries in the books of Arun and Tarun.
Solution:
Journal Books of Arun 

Date 
Particulars 
L.F. 
Debit Amount (Rs) 
Credit Amount (Rs) 

2017 

January 1 
Tarun 
Dr. 
20,000 

To Sales A/c 
20,000 

(Sold goods to Tarun) 

January 1 
Bills Receivable A/c 
Dr. 
20,000 

To Tarun 
20,000 

(Promissory note accepted byTarun) 

February 5 
Cash A/c 
Dr. 
20,000 

To Bills Receivable A/c 
20,000 

(Promissory note honoured on maturity) 
Books of Tarun Journal 

Date 
Particulars 
L.F. 
Debit â‚¹ 
Credit â‚¹ 

2017 

January 1 
Purchases A/c 
Dr. 
20,000 

To Arun (Purchased goods from Arun) 
20,000 

January 1 
Arun 
Dr. 
20,000 

To Bills Payable A/c (Promissory note withdrawn by Arun, accepted) 
20,000 

February 5 
Bills Payable A/c 
Dr. 
20,000 

To Cash A/c (Promissory note honoured on maturity) 
20,000 
Note: Here, 4th February 2017 falls on the emergency holiday, therefore, the due date will be on succeeding date i.e. 5th February, 2017.
Question 5
On Feb. 6, 2017, A sold goods for â‚¹ 1,00,000 to B. B paid 40% immediately on which A allowed a cash discount of â‚¹ 500. For the balance A drew a bill on B payable after 30 days. Due date of bill was a public holiday and the bill was met as per the provisions of the Negotiable Instrument Act. Journalise the above transactions in the books of A and B.
Solution:
Journal Books of A 

Date 
Particulars 
L.F. 
Debit â‚¹ 
Credit â‚¹ 

2017 

February 6 
Bâ€™s A/c 
Dr. 
1,00,000 

To Sales A/c (Sold goods to B) 
1,00,000 

February 6 
Cash A/c 
Dr. 
39,500 

Discount Allowed A/c 
Dr. 
500 

Bills Receivable A/c 
Dr. 
60,000 

To B (Bill accepted by B) 
1,00,000 

March 10 
Cash A/c 
Dr. 
60,000 

To Bills Receivable A/c (Bill honoured on maturity) 
60,000 
Journal Books of B 

Date 
Particulars 
L.F. 
Debit â‚¹ 
Credit â‚¹ 

2017 

February 6 
Purchases A/c 
Dr. 
1,00,000 

To A (Purchased goods from A) 
1,00,000 

February 6 
Aâ€™s A/c 
Dr. 
1,00,000 

To Cash A/c 
39,500 

To Discount Received A/c 
500 

To Bills Payable A/c (Bill withdrawn by A, accepted) 
60,000 

March 10 
Bills Payable A/c 
Dr. 
60,000 

To Cash A/c (Bill honoured on maturity) 
60,000 
Note: Here the due date falls on 11th March 2017 which falls on public holiday. Therefore, the due date will be on the preceding date i.e. March 10, 2017.
Question 6(A)
Vishal sold goods for â‚¹ 7,000 to Manju on Jan. 5, 2017 and drew upon her a bill of exchange payable after 2 months. Manju accepted Vishal’s draft and handed over the same to Vishal after acceptance. Vishal immediately discounted the bill with his bank @ 12% p.a. On the due date, Manju met her acceptance. Journalise the above transactions in the books of Vishal and Manju.
Solution:
Journal Books of Vishal 

Date 
Particulars 
L.F. 
Debit â‚¹ 
Credit â‚¹ 

2017 

January 5 
Manju 
Dr. 
7,000 

To Sales A/c (Sold goods to Manju) 
7,000 

January 5 
Bills Receivable A/c 
Dr. 
7,000 

To Manju (Bill accepted by Manju) 
7,000 

January 5 
Bank A/c 
Dr. 
6,860 

Discounting Charges A/c 
Dr. 
140 

To Bills Receivable A/c (Bank discounted bill for 2 months d@ 12% p.a.) 
7,000 
Journal Books of Manju 

Date 
Particulars 
L.F. 
Debit â‚¹ 
Credit â‚¹ 

2017 

January 5 
Purchases A/c 
Dr. 
7,000 

To Vishal (Purchased goods from Vishal) 
7,000 

January 5 
Vishal 
Dr. 
7,000 

To Bills Payable A/c (Bill withdrawn by Vishal, accepted) 
7,000 

March 8 
Bills Payable A/c 
Dr. 
7,000 

To Cash A/c (Bill honoured on maturity) 
7,000 
Working Note: Evaluating discounting Charges
Discounting charges = 7,000 X \(\frac{12}{100}\) X \(\frac{2}{12}\) = â‚¹ 140
Question 6(B)
On 15th February 2017, X sold goods to Y for â‚¹ 6,000. On the same day, Y accepted a bill drawn upon him by X for three months for â‚¹ 6,000. X immediately discounted the bill at 15% p.a. at his bank and Y met the bill on maturity. Make Journal entries in the books of both the parties.
Solution:
Journal Books of X 

Date 
Particulars 
L.F. 
Debit â‚¹ 
Credit â‚¹ 

2017 

February 15 
Yâ€™s A/c 
Dr. 
6,000 

To Sales A/c (Sold goods to Y) 
6,000 

February 15 
Bills Receivable A/c 
Dr. 
6,000 

To Y A/c (Bill accepted by Y) 
6,000 

February 15 
Bank A/c 
Dr. 
5,775 

Discounting Charges A/c 
Dr. 
225 

To Bills Receivable A/c (Bank discounted the bill discounted for 3months @ 15% p.a.) 
6,000 
Journal Books of Y 

Date 
Particulars 
L.F. 
Debit â‚¹ 
Credit â‚¹ 

2017 

February 15 
Purchases A/c 
Dr. 
6,000 

To Xâ€™s A/c (Purchased goods from X) 
6,000 

February 15 
Xâ€™s A/c 
Dr. 
6,000 

To Bills Payable A/c (Bill withdrawn by X, accepted) 
6,000 

May 18 
Bills Payable A/c 
Dr. 
6,000 

To Cash A/c (Bill honoured on maturity) 
6,000 
Working Note: Evaluating discounting charges
Discounting charges = 6,000 X \(\frac{15}{100}\) X \(\frac{3}{12}\) = â‚¹ 225
Question 7
B owed â‚¹ 5,100 to A. On 15th January, 2017, he accepted a bill for â‚¹ 5,000 for two months drawn by A in full settlement of his debt. On 18th January, 2017, A endorsed the bill to his creditor C. The bill was duly met on the date of maturity. Pass Journal entries in the books of A, B and C.
Solution:
Journal Books of A 

Date 
Particulars 
L.F. 
Debit â‚¹ 
Credit â‚¹ 

2017 

January 15 
Bills Receivable A/c 
Dr. 
5,000 

Discount Allowed A/c 
Dr. 
100 

To B (B accepted the bill) 
5,100 

January 18 
C 
Dr. 
5,000 

To Bills Receivable A/c 
5,000 

(Bill endorsed bill for C) 
Journal Books of B 

Date 
Particulars 
L.F. 
Debit â‚¹ 
Credit â‚¹ 

2017 

January 15 
Aâ€™s A/c 
Dr. 
5,100 

To Bills Payable A/c 
5,000 

To Discount Received A/c (Bill withdrawn by A, accepted) 
100 

March 18 
Bills Payable A/c 
Dr. 
5,000 

To Cash A/c 
5,000 

(Bill honoured on maturity) 
Journal Books of C 

Date 
Particulars 
L.F. 
Debit â‚¹ 
Credit â‚¹ 

2017 

January 18 
Bills Receivable A/c 
Dr. 
5,000 

To A (A received bill receivable) 
5,000 

March 18 
Cash A/c 
Dr. 
5,000 

To Bills Receivable A/c 
5,000 

(Bill honoured on maturity) 
Question 8
On 10th January, 2017, A sells goods to B for â‚¹ 12,000. On that date, B accepted a bill drawn upon him by A at two months for â‚¹ 12,000. A retains the bill till due date and on due date sends the bill to the Banker for collection. In due course, A receives the information from the Bank that the bill has been duly met.
Pass Journal Entries in the books of A and B.
Solution:
Journal Books of A 

Date 
Particulars 
L.F. 
Debit â‚¹ 
Credit â‚¹ 

2017 

January 10 
Bâ€™s A/c 
Dr. 
12,000 

To Sales A/c (Sold goods to B) 
12,000 

January 10 
Bills Receivable A/c 
Dr. 
12,000 

To B (Bill accepted by B) 
12,000 

March 13 
Bill Sent for Collection A/c 
Dr. 
12,000 

To Bills Receivable A/c (Bills sent to bank for collection) 
12,000 

March 13 
Bank A/c 
Dr. 
12,000 

To Bills Sent for Collection A/c (Bill honoured on maturity) 
12,000 
Journal Books of B 

Date 
Particulars 
L.F. 
Debit â‚¹ 
Creditâ‚¹ 

2017 

January 10 
Purchases A/c 
Dr. 
12,000 

To A 
12,000 

(Goods purchased from A) 

January 10 
Aâ€™s A/c 
Dr. 
12,000 

To Bills Payable A/c 
12,000 

(Bill withdrawn by A, accepted) 

March 13 
Bills Payable A/c 
Dr. 
12,000 

To Cash A/c 
12,000 

(Bill honoured on maturity) 
Question 9
On Jan. 15, 2017, Kusum sold goods for â‚¹ 30,000 to Pushpa and drew upon her three bills of exchanges of â‚¹ 10,000 each payable after one month, two months and three months respectively. The first bill was retained by Kusum till its maturity. The second bill was endorsed by her in favour of her creditor Khushboo and the third bill was discounted by her immediately @ 6% p.a. All the bills were met by Pushpa. Journalise the above transactions in the books of Kusum and Pushpa.
Solution:
Journal Books of Kusum 

Date 
Particulars 
L.F. 
Debit â‚¹ 
Credit â‚¹ 

2017 

January. 15 
Pushpa 
Dr. 
30,000 

To Sales A/c 
30,000 

(Sold goods to Pushpa) 

January 15 
Bills Receivable A/c (1) 
Dr. 
10,000 

Bills Receivable A/c (2) 
Dr. 
10,000 

Bills Receivable A/c (3) 
Dr. 
10,000 

To Pushpa 
30,000 

(Bill accepted by Pushpa) 

January 15 
Khushboo 
Dr. 
10,000 

To Bills Receivable A/c (2) 
10,000 

(Endoresed bill inKhushbooâ€™s favour) 

January 15 
Bank A/c 
Dr. 
9,850 

Discounting Charges A/c 
Dr. 
150 

To Bills Receivable A/c (3) 
10,000 

(Bank discounted bill for 3 months @ 6% p.a.) 

February 18 
Cash A/c 
Dr. 
10,000 

To Bills Receivable A/c (1) 
10,000 

(Bill honoured on maturity) 
Books of Pushpa Journal 

Date 
Particulars 
L.F. 
Debit â‚¹ 
Credit â‚¹ 

2017 

January 15 
Purchases A/c 
Dr. 
30,000 

To Kusum 
30,000 

(Purchased goods from Kusum) 

January 15 
Kusum 
Dr. 
30,000 

To Bills Payable A/c (1) 
10,000 

To Bills Payable A/c (2) 
10,000 

To Bills Payable A/c (3) 
10,000 

(Bills withdrawn by Kusum, accepted) 

February 18 
Bills Payable A/c 
Dr. 
10,000 

To Cash A/c 
10,000 

(Bill (1) honoured on maturity) 

March18 
Bills Payable A/c (2) 
Dr. 
10,000 

To Cash A/c 
10,000 

(Bill (2) honoured on maturity) 

April 18 
Bills Payable A/c (3) 
Dr. 
10,000 

To Cash A/c 
10,000 

(Bill (3) honoured on maturity) 
Working Notes: Evaluating discounting charges
Discounting charges = 610,000 X \(\frac{6}{100}\) X \(\frac{3}{12}\) = â‚¹ 150
Question 10
X draws on Y a bill for â‚¹ 4,000 which was duly accepted by Y. Y meets the bill on its due date. Show what entries would be passed in the books of X and Y under each of the following circumstances:
(i) If X retains the bill till due date.
(ii) If X discounts the same with his banker paying â‚¹ 100 for discount.
(iii) If X endorses the same to his creditor Z, in full settlement of his debt of â‚¹ 4,080.
(iv) If X sends the bill to his banker for collection.
Solution:
Journal Books of X 

Date 
Particulars 
L.F. 
Debit â‚¹ 
Credit â‚¹ 

Bill drawn by X 

Bills Receivable A/c 
Dr. 
4,000 

To Yâ€™s A/c (Bill accepted by Y) 
4,000 

(i) 
Bill retained till maturity 

Cash A/c 
Dr. 
4,000 

To Bills Receivable A/c (Bill honoured on maturity) 
4,000 

(ii) 
Bill discounted with bank 

Bank A/c 
Dr. 
3,900 

Discounting Charges A/c 
Dr. 
100 

To Bills Receivable A/c (Bill discounted with the bank) 
4,000 

(iii) 
Bill endorsed to Z 

Zâ€™s A/c 
Dr. 
4,080 

To Bills Receivable A/c 
4,000 

To Discount Received A/c (Bill endorsed in Zâ€™s favour) 
80 

(iv) 
Bill sent to bank for collection 

Bills Sent for Collection A/c 
Dr. 
4,000 

To Bills Receivable A/c (Bank received bill for collection) 
4,000 

Bank A/c 
Dr. 
4,000 

To Bill Sent for Collection A/c 
4,000 

(Bill honoured on maturity) 
Journal Books of Y 

Date 
Particulars 
L.F. 
Debit â‚¹ 
Credit â‚¹ 

Bill accepted by Y 

Xâ€™s A/c 
Dr. 
4,000 

To Bills Payable A/c (Bill drawn by Y, accepted) 
4,000 

Same entry will be passed in all the four cases 

Bills Payable A/c 
Dr. 
4,000 

To Cash A/c (Bill honoured on maturity) 
4,000 
Question 11
â€‹X made the following sales to Y:
Date 
Amount (â‚¹) 
Jan. 01, 2017 
20,000 
Jan. 08, 2017 
25,000 
Jan. 10, 2017 
10,000 
Jan. 15, 2017 
40,000 
For all the sales X drew bills on Y payable after 60 days. Bill drawn on Jan. 01, 2017 was retained by X with him till its due date. The bill drawn on Jan. 08, 2017 was discounted by X from the bank at 9% p.a. The bill drawn on Jan. 10, 2017 was endorsed by X to his creditor Z in full settlement of â‚¹ 10,400. On March 12, 2017 X sent the bill drawn on Jan. 15, 2017 to his bank for collection. All the bills were met by Y on due dates.
Pass necessary journal entries in the books of X and Y and prepare Y‘ s account in the books of X and X‘s account in the books of Y.
Solution:
Journal 

Date 
Particulars 
L.F. 
Debit â‚¹ 
Credit â‚¹ 

2017 

January 1 
Yâ€™s A/c 
Dr. 
20,000 

To Sales A/c (Goods sold to Y) 
20,000 

January 1 
Bills Receivable A/c (1) 
Dr. 
20,000 

To Yâ€™s A/c (Bill accepted by Y) 
20,000 

January 8 
Yâ€™s A/c 
Dr. 
25,000 

To Sales A/c 
25,000 

(Sold goods to Y) 

January 8 
Bills Receivable A/c (2) 
Dr. 
25,000 

To Yâ€™s A/c 
25,000 

(Bill accepted by Y) 

January 8 
Bank A/c 
Dr. 
24,630 

Discounting Charges A/c 
Dr. 
370 

To Bills Receivable A/c (2) 
25,000 

(Bank discounted the bill for 60 days @ 9% p.a.) 

January 10 
Yâ€™s A/c 
Dr. 
10,000 

To Sales A/c 
10,000 

(Sold goods to Y) 

January 10 
Bills Receivable A/c (3) 
Dr. 
10,000 

To Yâ€™s A/c 
10,000 

( Y accepted the bill) 

January 10 
Zâ€™s A/c 
Dr. 
10,400 

To Bills Receivable A/c (3) 
10,000 

To Discount Received A/c 
400 

(Bill endorsed in Zâ€™s favour) 

January 15 
Yâ€™s A/c 
Dr. 
40,000 

To Sales A/c 
40,000 

(Sold goods to Y) 

January 15 
Bills Receivable A/c (4) 
Dr. 
40,000 

To Yâ€™s A/c 
40,000 

(Y accepted the bill) 

March 5 
Cash A/c 
Dr. 
20,000 

To Bills Receivable A/c (1) 
20,000 

(Bill honoured on maturity) 

March 12 
Bill Sent for Collection A/c 
Dr. 
40,000 

To Bills Receivable A/c (4) 
40,000 

(Bill sent to the bank for collection) 

March 19 
Bank A/c 
Dr. 
40,000 

To Bills for Collection A/c 
40,000 

(Bill honoured on maturity) 
Yâ€™s Account 

Dr. 
Cr. 

Date 
Particulars 
J.F. 
â‚¹ 
Date 
Particulars 
J.F. 
â‚¹ 

2017 
2017 

January 1 
Sales A/c 
20,000 
January1 
Bills Receivable A/c (1) 
20,000 

January 8 
Sales A/c 
25,000 
January 8 
Bills Receivable A/c (2) 
25,000 

January 10 
Sales A/c 
10,000 
January 10 
Bills Receivable A/c (3) 
10,000 

January 15 
Sales A/c 
40,000 
January 15 
Bills Receivable A/c (4) 
40,000 

95,000 
95,000 
Journal Books of Y 

Date 
Particulars 
L.F. 
Debit â‚¹ 
Credit â‚¹ 

2017 

January 1 
Purchases A/c 
Dr. 
20,000 

To X 
20,000 

(Goods purchased from X) 

January 1 
X 
Dr. 
20,000 

To Bills Payable A/c (1) 
20,000 

(Bill drawn by X, accepted) 

January 8 
Purchases A/c 
Dr. 
25,000 

To X 
25,000 

(Goods purchased from X) 

January 8 
X 
Dr. 
20,000 

To Bills Payable A/c (2) 
20,000 

(Bill drawn by X, accepted) 

January 10 
Purchases A/c 
Dr. 
10,000 

To X 
10,000 

(Goods purchased from X) 

January.10 
X 
Dr. 
10,000 

To Bills Payable A/c (3) 
10,000 

(Bill drawn by X, accepted) 

January 15 
Purchases A/c 
Dr. 
40,000 

To X 
40,000 

(Goods purchased from X) 

January 15 
X 
Dr. 
40,000 

To Bills Payable A/c (4) 
40,000 

(Bill drawn by X, accepted) 

March 5 
Bills Payable A/c (1) 
Dr. 
20,000 

To Cash A/c 
20,000 

(Bill honoured on maturity) 

March 12 
Bills Payable A/c (2) 
Dr. 
25,000 

To Cash A/c 
25,000 

(Bill honoured on maturity) 

March 14 
Bills Payable A/c (3) 
Dr. 
10,000 

To Cash A/c 
10,000 

(Bill honoured on maturity) 

March 19 
Bills Payable A/c (4) 
Dr. 
40,000 

To Cash A/c 
40,000 

(Bill honoured on maturity) 
Xâ€™s Account 

Dr. 

Cr. 

Date 
Particulars 
J.F. 
â‚¹ 
Date 
Particulars 
J.F. 
â‚¹ 

2017 
2017 

January 1 
Bills Payable A/c (1) 
20,000 
January 1 
Purchases A/c 
20,000 

January 8 
Bills Payable A/c (2) 
25,000 
January 8 
Purchases A/c 
25,000 

January 10 
Bills Payable A/c (3) 
10,000 
January 10 
Purchases A/c 
10,000 

January 15 
Bills Payable A/c (4) 
40,000 
January15 
Purchases A/c 
40,000 

95,000 
95,000 
Working Note: Evaluating discounting charges
Discounting charges = 25,000 X \(\frac{9}{100}\) X \(\frac{60}{365}\) = â‚¹ 365
Question 12
On January 1, 2017, Ajay sold goods to Balbir for â‚¹ 10,000 at a discount of 20%. On that date, Balbir accepted a bill, drawn on him by Ajay for â‚¹ 8,000 payable 3 months after sight. Having surplus funds, Balbir paid off the bill on 4th March, 2017 and was allowed a rebate of 18% per annum. Show Journal entries in the books of Ajay and Balbir.
Solution:
Journal Book of Ajay 

Date 
Particulars 
L.F. 
Debit â‚¹ 
Credit â‚¹ 

2017 

January 1 
Balbir 
Dr. 
8,000 

Discount Allowed A/c 
2,000 

To Sales A/c (Goods sold to Balbir) 
10,000 

January 1 
Bills Receivable A/c 
Dr. 
8,000 

To Balbir 
8,000 

(Bill accepted by Balbir) 

March 4 
Cash A/c 
Dr. 
7,880 

Rebate A/c 
Dr. 
120 

To Bills Receivable A/c (Bill retired under the rebate of 18% p.a. for one month) 
8,000 
Books of Balbir Journal 

Date 
Particulars 
L.F. 
Debit â‚¹ 
Credit â‚¹ 

2017 

January 1 
Purchases A/c 
Dr. 
8,000 

To Ajay 
8,000 

(Goods purchased from Ajay) 

January 1 
Ajay 
Dr. 
8,000 

To Bills Payable A/c 
8,000 

(Bill drawn by Ajay, accepted) 

March 4 
Bills Payable A/c 
Dr. 
8,000 

To Cash A/c 
7,880 

To Rebate A/c 
120 

(Bill retired under the rebate of 18% p.a. for one month) 
Working Note: Evaluating Rebate amount
Amount of Rebate=8,000 X \(\frac{18}{100}\) X \(\frac{1}{12}\) = â‚¹ 120
Question 13
On 17th April, 2016, X sold goods to Y for â‚¹ 80,000 and draws a bill for 2 months upon Y for the amount due. Y accepted the bill and returned it to X. On the due date the bill became dishonoured and X paid â‚¹ 400 as Noting Charges. Fifteen days later Y pays the amount due to X. Pass Journal entries in the books of both the parties.
Solution:
Books of X Journal 

Date 
Particulars 
L.F. 
Debit â‚¹ 
Credit â‚¹ 

2016 

April 17 
Yâ€™s A/c 
Dr. 
80,000 

To Sales A/c 
80,000 

(GSold goods to Y) 

April 17 
Bills Receivable A/c 
Dr. 
80,000 

To Yâ€™s A/c 
80,000 

(Bill was accepted by Y) 

June 20 
Yâ€™s A/c 
Dr. 
80,400 

To Bills Receivable A/c 
80,000 

To Cash A/c 
400 

(Bill dishonoured on due date and received noting charges) 

July 5 
Cash A/c 
Dr. 
80,400 

To Y 
80,400 

(Y received cash) 
Books of Y Journal 

Date 
Particulars 
L.F. 
Debit â‚¹ 
Credit â‚¹ 

2016 

April 17 
Purchases A/c 
Dr. 
80,000 

To Xâ€™s A/c 
80,000 

(Goods purchased from X) 

April 17 
Xâ€™s A/c 
Dr. 
80,000 

To Bills Payable A/c 
80,000 

(Bill withdrawn by X, accepted) 

June 20 
Bills Payable A/c 
Dr. 
80,000 

Noting Charges A/c 
Dr. 
400 

To Xâ€™s A/c 
80,400 

(Bills dishonoured on due date and paid notice charge) 

July 05 
Xâ€™s A/c 
Dr. 
80,400 

To Cash A/c 
80,400 

(Paid to X) 
Question 14 (A)
On 1st April, 2016, B accepts a bill drawn by A at three months for â‚¹ 8,000 in payment of debt. On the due date the acceptance is dishonoured and A gets the bill noted paying â‚¹ 100. On 4th July, 2016 A draws a new bill payable after 73 days provided interest is paid in cash @ 15% p.a. To this B is agreeable. The bill is met on maturity.
Record these transactions in the Journal of both the parties.
Solution:
Books of A Journal 

Date 
Particulars 
L.F. 
Debit â‚¹ 
Credit â‚¹ 

2016 

April 1 
Bills Receivable A/c 
Dr. 
8,000 

To Bâ€™s A/c 
8,000 

(Bill accepted by B) 

July 04 
Bâ€™s A/c 
Dr. 
8,100 

To Bills Receivable A/c 
8,000 

To Cash A/c 
100 

(Bill dishonoured on due date and received noting charges) 

July 4 
Bâ€™s A/c 
Dr. 
243 

To Interest A/c 
243 

(Due Interest to be received) 

July 4 
Cash A/c 
Dr. 
243 

Bills Receivable A/c 
Dr. 
8,100 

To B 
8,343 

(New bill accepted by B) 

Sept. 18 
Cash 
Dr. 
8,100 

To Bills Receivable A/c 
8,100 

(Bill honoured on maturity) 
Journal Books of B 

Date 
Particulars 
L.F. 
Debit â‚¹ 
Credit â‚¹ 

2016 

April 1 
Aâ€™s A/c 
Dr. 
8,000 

To Bills Payable A/c 
8,000 

(Bill drawn by A, accepted) 

July 4 
Bills Payable A/c 
Dr. 
8,000 

Noting Charges A/c 
Dr. 
100 

To Aâ€™s A/c 
8,100 

(Bill dishonoured on due date and paid noting charges) 

July 04 
Interest A/c 
Dr. 
243 

To Aâ€™s A/c 
243 

(Due interest to be paid) 

July 4 
Aâ€™s A/c 
Dr. 
8,343 

To Cash A/c 
243 

To Bills Payable A/c (New) 
8,100 

(New bill drawn by A, accepted) 

September 18 
Bills Payable A/c 
Dr. 
8,100 

To Cash A/c 
8,100 

(Bill honoured on maturity) 
Working Note: Evaluating amount of Interest
Amount of Interest=8,100X \(\frac{15}{100}\) X \(\frac{73}{365}\) = â‚¹ 243
Question 14 (B)
On 15th October, 2016, Y purchased goods worth â‚¹ 75,000 from X, and accepted a three months bill for this amount drawn by X. On the due date, it was dishonoured. Noting charges paid by X â‚¹ 600. On 18th January, 2017, Y requested X for renewal of the bill for another two months, for which X agrees, provided that interest is paid @ 15% p.a. in cash. Make Journal entries of these transactions in the books of X and Y.
Solution:
Books of X Journal 

Date 
Particulars 
L.F. 
Debit â‚¹ 
Credit â‚¹ 

2016 

October 15 
Yâ€™s A/c 
Dr. 
75,000 

To Sales A/c 
75,000 

(Goods sold to Y) 

October 15 
Bills Receivable A/c 
Dr. 
75,000 

To Yâ€™s A/c 
75,000 

(Y accepted the bill) 

2017 

January 18 
Yâ€™s A/c 
Dr. 
75,600 

To Bills Receivable A/c 
75,000 

To Cash A/c 
600 

(Bill dishonoured on due date and noting charges paid) 

January 18 
Yâ€™s A/c 
Dr. 
1,890 

To Interest A/c 
1,890 

(Interest due to be received) 

January 18 
Cash A/c 
Dr. 
1,890 

Bills Receivable A/c 
Dr. 
75,600 

To Yâ€™s A/c 
77,490 

(Y accepted the new bill) 

March 21 
Cash 
Dr. 
75,600 

To Bills Receivable A/c 
75,600 

(Bill honoured on maturity) 
Books of Y Journal 

Date 
Particulars 
L.F. 
Debit â‚¹ 
Credit â‚¹ 

2016 

October 15 
Purchases A/c 
Dr. 
75,000 

To Xâ€™s A/c 
75,000 

(Goods purchased from X) 

October 15 
Xâ€™s A/c 
Dr. 
75,000 

To Bills Payable A/c 
75,000 

(Bill drawn by X, accepted) 

2017 

January 18 
Bills Payable A/c 
Dr. 
75,000 

Noting Charges A/c 
Dr. 
600 

To Xâ€™s A/c 
75,600 

(Bill dishonoured on due date and noting charges paid) 

January 18 
Interest A/c 
Dr. 
1,890 

To Xâ€™s A/c 
1,890 

(Interest due to be paid) 

January 18 
Xâ€™s A/c 
Dr. 
77,490 

To Cash A/c 
1,890 

To Bills Payable A/c 
75,600 

(New bill drawn by X, accepted) 

March 21 
Bills Payable A/c 
Dr. 
75,600 

To Cash A/c 
75,600 

(Bill honoured on maturity) 

Working Notes: Evaluating amount of interest
Amount of interest = 75,600 X \(\frac{15}{100}\) X \(\frac{2}{12}\) = â‚¹ 1,890
Question 15
On 1st January, 2018, Dinesh purchased goods from Chander for â‚¹ 60,000 plus CGST and SGST @ 6% each. Dinesh pays â‚¹ 7,200 in cash and accepts a bill drawn by Chander for the balance amount payable after two months. On the due date Dinesh is able to manage â‚¹ 20,000 in cash and he arranges with Chander for the retirement of the bill in consideration of this payment and a fresh bill at four months for the balance plus interest at 18% per annum. The second bill is duly met on maturity.
Make the necessary Journal entries in the books of Chander and Dinesh.
Solution:
Journal Books of Chander 

Date 
Particulars 
L.F. 
Debit â‚¹ 
Credit â‚¹ 

2018 

January 1 
Chander A/c 
Dr. 
67,200 

To Sales A/c 
60,000 

To Output CGST A/c 
3,600 

To Output SGST A/c 
3,600 

(Sold goods to Dinesh @ 6% SGST & CGST) 

January 1 
Bills Receivable A/c 
Dr. 
60,000 

Cash A/c 
Dr. 
7,200 

To Dinesh A/c 
67,200 

(Paid a portion amount in cash and remaining amount a bill was drawn) 

March 4 
Dinesh 
Dr. 
60,000 

To Bills Receivable A/c 
60,000 

(Cancelled bill on the due date) 

March 4 
Cash A/c 
Dr. 
20,000 

To Dinesh 
20,000 

(Received cash from Dinesh) 

March 4 
Dinesh 
Dr. 
2,400 

To Interest A/c 
2,400 

(Due interest to be received) 

March 4 
Bills Receivable A/c 
Dr. 
42,400 

To Dinesh 
42,400 

(New bill accepted by Dinesh) 

July 7 
Cash A/c 
Dr. 
42,400 

To Bills Receivable A/c 
42,400 

(Bill honoured on due date) 
Journal Books of Dinesh 

Date 
Particulars 
L.F. 
Debit â‚¹ 
Credit â‚¹ 

2018 

January 1 
Purchases A/c 
Dr. 
60,000 

Input CGST A/c 
Dr. 
3,600 

Input SGST A/c 
Dr. 
3,600 

To Chander 
67,200 

(Purchased goods from Chander @ 6% CGST & SGST) 

January 1 
Chander 
Dr. 
67,200 

To Bills Payable A/c 
60,000 

To Cash A/c 
7,200 

(A portion of amount made in cash and bill drawn for remaining amount) 

March 4 
Bills Payable A/c 
Dr. 
60,000 

To Chander 
60,000 

(On due date bill dishonoured) 

March 4 
Chander 
Dr. 
20,000 

To Cash A/c 
20,000 

(Paid cash to Chander) 

March 4 
Interest A/c 
Dr. 
2,400 

To Chander 
2,400 

(Due interest due to be paid) 

March 4 
Chander 
Dr. 
42,400 

To Bills Payable A/c 
42,400 

(Chander accepted the new bill drawn) 

July 7 
Bills Payable A/c 
Dr. 
42,400 

To Cash A/c 
42,400 

(Paid cash to Chander) 
Working Note: Evaluating amount of Interest
Amount of Interest = 40,000 X \(\frac{18}{100}\) X \(\frac{4}{12}\) = â‚¹ 2,400
Question 16
A sells goods for â‚¹ 30,000 to B on 1st January, 2017 and on the same day draws a bill on B at three months for the amount. B accepts it and returns it to A, who discounts it on 4th February, 2017 with his bank at 18% per annum. The acceptance is dishonoured on the due date, the noting charges paid by the bank being â‚¹ 200.
On 4th April, 2017, B accepts a new bill at two months for the amount then due to A together with interest at 12 per cent per annum.
Make Journal entries to record these transactions in the books of A and B.
Solution:
Journal Books of A 

Date 
Particulars 
L.F. 
Debit â‚¹ 
Credit â‚¹ 

2017 

January 1 
Bâ€™s A/c 
Dr. 
30,000 

To Sales A/c 
30,000 

(Sold goods to B) 

January 1 
Bills Receivable A/c 
Dr. 
30,000 

To Bâ€™s A/c 
30,000 

(Bill accepted by B) 

February 4 
Bank A/c 
Dr. 
29,100 

Discounting Charges A/c 
Dr. 
900 

To Bills Receivable A/c 
30,000 

(Bank gave discount for 2 months @ 18% p.a.) 

April 4 
Bâ€™s A/c 
Dr. 
30,200 

To Bank A/c 
30,200 

(Bill dishonoured on due date and paid noting charges) 

April 4 
Bâ€™s A/c 
Dr. 
604 

To Interest A/c 
604 

(Received due interest) 

April 4 
Bills Receivable A/c 
Dr. 
30,804 

To Bâ€™s A/c 
30,804 

(New bill accepted by B) 

June 7 
Cash A/c 
Dr. 
30,804 

To Bills Receivable A/c 
30,804 

(On due date bill was honoured) 
Journal Books of B 

Date 
Particulars 
L.F. 
Debit â‚¹ 
Credit â‚¹ 

2017 

January 1 
Purchases A/c 
Dr. 
30,000 

To Aâ€™s A/c 
30,000 

(Purchased goods from A) 

January 1 
Aâ€™s A/c 
Dr. 
30,000 

To Bills Payable A/c 
30,000 

(Bill withdrawn by A, accepted) 

April 4 
Bills Payable A/c 
Dr. 
30,000 

Noting Charges A/c 
Dr. 
200 

To Aâ€™s A/c 
30,200 

(On due date bill dishonoured and paid noting charges) 

Apr. 04 
Interest A/c 
Dr. 
604 

To Aâ€™s A/c 
604 

(Due interest to be paid) 

Apr. 04 
Aâ€™s A/c 
Dr. 
30,804 

To Bills Payable A/c 
30,804 

(A drawn new bill, accepted) 

June 07 
Bills Payable A/c 
Dr. 
30,804 

To Cash A/c 
30,804 

(On due date bill honoured) 
Working Note 1: Evaluating discounting charges
Discounting Charges= 30,000 X \(\frac{18}{100}\) X \(\frac{2}{12}\) = â‚¹ 900
Working Note 2: Evaluating amount of interest
Amount of interest = 30,200 X \(\frac{12}{100}\) X \(\frac{2}{12}\) = â‚¹ 604
Question 17
On 21st Sept. 2017, Radhika sold goods for â‚¹ 2,00,000 to Parvati and drew upon later a bill for the same amount payable after 3 months. The bill was accepted by Parvati, Radhika discounted the bill from the bank at a discount of 15% p.a. on the 21st Oct., 2017. On maturity, the bill was dishonoured. Parvati agreed to pay â‚¹ 1,20,000 in cash including â‚¹ 3,000 interest and accepted a new bill for 3 months. The new bill was endorsed to Gayatri in full settlement of his account â‚¹ 85,000. It was duly met on maturity. Pass entries in the books of Radhika.
Solution:
Journal books of Radhika (Drawer) 

Date 
Particulars 
L.F. 
Debit â‚¹ 
Credit â‚¹ 

2017 

September 21 
Parvatiâ€™s A/c 
Dr. 
2,00,000 

To Sales A/c 
2,00,000 

(Sold goods to Parvati) 

September 21 
Bills ReceivableA/c 
Dr. 
2,00,000 

To Parvatiâ€™s A/c 
2,00,000 

(Receive Bill) 

October 21 
Bank A/c 
Dr. 
1,95,000 

Discounting Charges A/c 
Dr. 
5,000 

To Bills Receivable A/c 
2,00,000 

(Bill discounted for 2 months @ 15%) 

December 24 
Parvatiâ€™s A/c 
Dr. 
2,00,000 

To Bank A/c (Bill dishonoured) 
2,00,000 

December 24 
Parvatiâ€™s A/c 
Dr. 
3,000 

To Interest A/c 
3,000 

(Interest due) 

December 24 
Cash A/c 
Dr. 
1,20,000 

Bill Receivable A/c 
Dr. 
83,000 

To Parvatiâ€™s A/c 
2,03,000 

(Cash and new bill received from Parvati) 

December 24 
Gayatriâ€™s A/c 
Dr. 
85,000 

To Bills Receivable A/c 
83,000 

To Discount Received A/c 
2,000 

(New bill endorsed in full settlement) 

Question 18
Asha sold goods worth â‚¹ 19,000 to Nisha on March 2, 2016. â‚¹ 4,000 were paid by Nisha immediately and for the balance she accepted a bill of exchange drawn upon her by Asha payable after three months. Asha discounted the bill immediately with her bank @ 10% p.a. On the due date Nisha dishonoured the bill and the bank paid â‚¹ 30 as noting charges.
On 5th June, Nisha paid â‚¹ 3,030 (including noting charges) in cash and accepted a new bill at one month for the amount due to Asha together with interest @ 15% p.a.
Record the necessary journal entries in the books of Asha and Nisha.
Solution:
Ashaâ€™s Journal 

Date 
Particulars 
L.F. 
Debit â‚¹ 
Credit â‚¹ 

2016 

March 2 
Nisha 
Dr. 
19,000 

To Sales A/c 
19,000 

(Sold goods) 

March 2 
Bills Receivable A/c 
Dr. 
15,000 

Cash A/c 
Dr. 
4,000 

To Nisha 
19,000 

(Received acceptance) 

March 2 
Bank A/c 
Dr. 
14,625 

Discounting Charges A/c 
Dr. 
375 

To Bills Receivable A/c 
15,000 

(Bill discounted @10% p.a.) 

June 5 
Nisha (15,000 + 30) 
Dr. 
15,030 

To Bank A/c (Bill dishonored) 
15,030 

June 5 
Nisha 
Dr. 
150 

To Interest A/c (Due Interest) 
150 

June 5 
Cash A/c 
Dr. 
3,030 

Bills Receivable (New) A/c (12,000 + 150) 
Dr. 
12,150 

To Nisha 
15,180 

(Received New Acceptance) 

Working Notes 1:Evaluating discount amount
Discount Amount = \(\frac{15,000\, X\, 10\, X\, 3}{100\, X\, 12}\) = â‚¹375
Working Notes 2: Evaluating interest amount
Interest Amount = \(\frac{12,000\, X\, 15\, X\, 1}{100\, X\, 12}\) = â‚¹150
Nishaâ€™s Journal 

Date 
Particulars 
L.F. 
Debit â‚¹ 
Credit â‚¹ 

2016 

March 2 
Purchases A/c 
Dr. 
19,000 

To Asha 
19,000 

(Purchased goods) 

March 2 
Asha 
Dr. 
19,000 

To Cash A/c 
4,000 

To Bills Payable A/c 
15,000 

(Received acceptance) 

June 5 
Bills Payable A/c 
Dr. 
15,000 

Noting Charges A/c 
Dr. 
30 

To Asha 
15,030 

(Dishonored Bill) 

June 5 
Interest A/c 
Dr. 
150 

To Asha 
150 

(Due Interest) 

June 5 
Asha 
Dr. 
15,180 

To Bills Payable A/c (12,000+150) 
12,150 

To Cash A/c (Received New Acceptance) 
3,030 
Question 19
A sold goods for â‚¹ 40,000 to B on Jan. 01, 2017. He drew upon B a bill of exchange for the same amount payable after 1 month. B accepted the bill and sent it back to A. A discounted the bill immediately with his bank @ 9% p.a. On the due date B dishonoured the bill of exchange and the bank paid â‚¹ 200 as noting charges. B requested A to draw a new bill upon him with interest @ 12% p.a. which he agreed. The new bill was payable after 1 month. One week before the maturity of the second bill B requested A to cancel the second bill. He further requested to accept â‚¹ 15,000 in cash immediately and draw a third bill upon him including interest of â‚¹ 1,000. A agreed to B’s request. The third bill was payable after one month. B met the third bill on its maturity. Record the necessary journal entries in the books of A and B and also prepare B’s account in the books of A and A’s account in the books of B.
Solution:
Journal Books of A 

Date 
Particulars 
L.F. 
Debit â‚¹ 
Credit â‚¹ 

2017 

January 1 
Bâ€™s A/c 
Dr. 
40,000 

To Sales A/c 
40,000 

(Goods sold to B) 

January 1 
Bills Receivable A/c 
Dr. 
40,000 

To Bâ€™s A/c 
40,000 

(B Accepted the bill) 

January 1 
Bank A/c 
Dr. 
39,700 

Discount Charges A/c 
Dr. 
300 

To Bills Receivable A/c 
40,000 

(Bill discounted with the bank @ 9% p.a. for 1 month) 

February 4 
Bâ€™s A/c 
Dr. 
40,200 

To Bank A/c 
40,200 

(Bill dishonoured on due and noting charges paid) 

February 4 
Bâ€™s A/c 
Dr. 
402 

To Interest A/c 
402 

(Interest due to be received) 

February 4 
Bills Receivable A/c 
Dr. 
40,602 

To Bâ€™s A/c 
40,602 

(B accepted the new bill) 

February 28 
Bâ€™s A/c 
Dr. 
40,602 

To Bills Receivable A/c 
40,602 

(New bill dishonoured) 

February 28 
Bâ€™s A/c 
Dr. 
1,000 

To Interest A/c 
1,000 

(Interest due to be received) 

February 28 
Cash A/c 
Dr. 
15,000 

To Bâ€™s A/c 
15,000 

(Cash received from B) 

February. 28 
Bills Receivable A/c 
Dr. 
26,602 

To Bâ€™s A/c 
26,602 

(B accepted the new bill) 

March 31 
Cash A/c 
Dr. 
26,602 

To Bills Receivable A/c 
26,602 

(Bill honoured on due date) 
Bâ€™s Account 

Dr. 
Cr. 

Date 
Particulars 
J.F. 
Amount â‚¹ 
Date 
Particulars 
J.F. 
Amountâ‚¹ 

2017 
2017 

January 1 
Sales A/c 
40,000 
January 1 
Bills Receivable A/c 
40,000 

February 4 
Bank A/c 
40,200 
February 4 
Bills Receivable A/c 
40,602 

February 4 
Interest A/c 
402 
February 28 
Cash A/c 
15,000 

February 28 
Bills Receivable A/c 
40,602 
February 28 
Bills Receivable A/c 
26,602 

February 28 
Interest A/c 
1,000 

1,22,204 
1,22,204 
Journal Books of B 

Date 
Particulars 
L.F. 
Debit â‚¹ 
Credit â‚¹ 

2017 

January 1 
Purchases A/c 
Dr. 
40,000 

To Aâ€™s A/c 
40,000 

(Goods purchased from A) 

January 1 
Aâ€™s A/c 
Dr. 
40,000 

To Bills Payable A/c 
40,000 

(Bill drawn by A, accepted) 

February 4 
Bills Payable A/c 
Dr. 
40,000 

Noting Charges A/c 
Dr. 
200 

To Aâ€™s A/c 
40,200 

(Bill dishonoured on due date and noting charges paid) 

February 4 
Interest A/c 
Dr. 
402 

To Aâ€™s A/c 
402 

(Interest due to be paid) 

February 4 
Aâ€™s A/c 
Dr. 
40,602 

To Bills Payable A/c 
40,602 

(New bill drawn by A, accepted) 

February 28 
Bills Payable A/c 
Dr. 
40,602 

To Aâ€™s A/c 
40,602 

(New bill dishonoured) 

February 28 
Interest A/c 
Dr. 
1,000 

To Aâ€™s A/c 
1,000 

(Interest due to be paid) 

February 28 
Aâ€™s A/c 
Dr. 
15,000 

To Cash A/c 
15,000 

(Cash paid to A) 

Feb. 28 
Aâ€™s A/c 
26,602 

To Bills Payable A/c 
26,602 

(New bill drawn by A, accepted) 

March 31 
Bills Payable A/c 
Dr. 
26,602 

To Cash A/c 
26,602 

(Bill honoured on due date) 
Aâ€™s Account 

Dr. 
Cr. 

Date 
Particulars 
J.F. 
Amount â‚¹ 
Date 
Particulars 
J.F. 
Amount â‚¹ 

2017 
2017 

January 1 
Bills Payable A/c 
40,000 
January 1 
Purchases A/c 
40,000 

February 4 
Bills Payable A/c 
40,602 
January 1 
Bills Payable A/c 
40,000 

February 28 
Cash A/c 
15,000 
February 4 
Noting Charges A/c 
200 

February 28 
Bills Payable A/c 
26,602 
February 4 
Interest A/c 
402 

February 28 
Bills Payable A/c 
40,602 

February 28 
Interest A/c 
1,000 

1,22,204 
1,22,204 
Working Notes 1 : Evaluating Discounting Charges
Discounting Charges= 40,000 X \(\frac{9}{100}\) X \(\frac{1}{12}\) = â‚¹ 300
Working Notes 2 : Evaluating Interest Amount
Interest Amount= 40,200 X \(\frac{12}{100}\) X \(\frac{1}{12}\) = â‚¹ 402
Question 20
Journalise the following transaction in the books of Rajni:
Geeta’s acceptance of â‚¹ 20,000 which had been discounted with the bank for â‚¹ 19,500 has been returned by the Bank dishonoured. Noting charges paid by Bank â‚¹ 25.
Solution:
Journal Books of Rajni 

Date 
Particulars 
L.F. 
Debit â‚¹ 
Credit â‚¹ 

Geeta 
Dr. 
20,025 

To Bank A/c 
20,025 

(Discounted bill dishonoured and noting charges paid) 
Question 21(A)
A Bill receivable for â‚¹ 10,000, which had been discounted for â‚¹ 9,700, is dishonoured and the Bank paid â‚¹ 20 as noting charges.
Pass entries in the books of drawer and drawee.
Solution:
Journal Books of Drawer 

Date 
Particulars 
L.F. 
Debit â‚¹ 
Credit â‚¹ 

Draweeâ€™s A/c 
Dr. 
10,020 

To Bank A/c 
10,020 

(Discounted bill dishonoured and noting charges paid) 
Journal Books of Drawee 

Date 
Particulars 
L.F. 
Debit â‚¹ 
Credit â‚¹ 

Bills Payable A/c 
Dr. 
10,000 

Noting Charges A/c 
Dr. 
20 

To Drawerâ€™s A/c 
10,020 

(Bills dishonoured and noting charges paid) 
Question 21(B)
Journalise the following in the books of X:
Y‘s acceptance for â‚¹ 2,00,000 which was discounted by X from the bank has been dishonoured, noting charges paid by bank being â‚¹ 100.
Solution:
Journal Books of X 

Date 
Particulars 
L.F. 
Debit â‚¹ 
Credit â‚¹ 

Yâ€™s A/c 
Dr. 
2,00,100 

To Bank A/c 
2,00,100 

(Discounted bill dishonoured and noting charges paid) 
Question 22
On 10th April, 2018, Ravi purchased from Mohan goods for â‚¹ 30,000 plus CGST and SGST @ 9% each. Ravi paid â‚¹ 15,400 in cash and accepted a bill for two months for the balance amount drawn on him by Mohan. Mohan endorsed the bill to Rakesh. The bill was dishonoured on the due date. Rakesh had to spend â‚¹ 100 as noting charges.
Immediately after the dishonour, Mohan accepted a new bill drawn by Rakesh, in which â‚¹ 200 for interest were also included. After 20 days of the dishonour of the bill, Ravi paid full amount of Mohan including â‚¹ 50 as interest. Show Journal entries in the books of Ravi, Mohan and Rakesh.
Solution:
Journal Books of Mohan 

Date 
Particulars 
L.F. 
Debit â‚¹ 
Credit â‚¹ 

2018 

April 10 
Ravi 
Dr. 
35,400 

To Sales A/c 
30,000 

To Output CGST A/c 
2,700 

To Output SGST A/c 
2,700 

(Sold goods plus 9% intrastate GST) 

April 10 
Bills Receivable A/c 
Dr. 
20,000 

Cash A/c 
Dr. 
15,400 

To Ravi 
35,400 

(Ravi paid in portion and remaining amount was accepted in bill) 

April 10 
Rakesh 
Dr. 
20,000 

To Bills Receivable A/c 
20,000 

(Bill endorsed in favour of Rakesh) 

June 13 
Ravi 
Dr. 
20,100 

To Rakesh 
20,100 

(On due date bill was dishonoured and noting charges to be paid) 

June 13 
Interest A/c 
Dr. 
200 

To Rakesh 
200 

(Due interest to be paid to Rakesh) 

June 13 
Rakesh 
Dr. 
20,300 

To Bills Payable A/c 
20,300 

(Bill withdrawn by Rakesh, accepted) 

July 3 
Ravi 
Dr. 
50 

To Interest A/c 
50 

(Due interest to be received) 

July 3 
Cash A/c 
Dr. 
20,150 

To Ravi 
20,150 

(Received cash from Ravi) 
Journal Books of Ravi 

Date 
Particulars 
L.F. 
Debit â‚¹ 
Credit â‚¹ 

2018 

April 10 
Purchases A/c 
Dr. 
30,000 

Input CGST A/c 
Dr. 
2,700 

Input SGST A/c 
Dr. 
2,700 

To Mohan 
35,400 

(Purchased goods with 9% intrastate GST) 

April 10 
Mohan 
Dr. 
35,400 

To Bills Payable A/c 
20,000 

To Cash A/c 
15,400 

(Made portion of payment and remaining amount bill drawn by Mohan, accepted) 

June 13 
Bills Payable A/c 
Dr. 
20,000 

Noting Charges A/c 
Dr. 
100 

To Mohan 
20,100 

(Bill dishonoured on due date and noting charges to be paid) 

July 3 
Interest A/c 
Dr. 
50 

To Mohan 
50 

(Due interest to be paid) 

July 3 
Mohan 
Dr. 
20,150 

To Cash A/c 
20,150 

(Paid cash to Mohan) 
Books of Rakesh Journal 

Date 
Particulars 
L.F. 
Debit Amount (â‚¹) 
Credit Amount (â‚¹) 

2018 

April 10 
Bills Receivable A/c 
Dr. 
20,000 

To Mohan 
20,000 

(Bill receivable received from Mohan) 

June 13 
Mohan 
Dr. 
20,100 

To Bills Receivable A/c 
20,000 

To Cash A/c 
100 

(On due date bill dishonoured and noting paid charged) 

June 13 
Mohan 
Dr. 
200 

To Interest A/c 
200 

(Due interest to be received) 

June 13 
Bills Receivable A/c 
Dr. 
20,300 

To Mohan 
20,300 

(New bill accepted by Mohan) 
Question 23
On March 4, 2017, A purchased from B goods for â‚¹ 50,000. A paid 40% immediately and for the balance gave a promissory note to B payable after 30 days. B immediately endorsed the promissory note in favour of his creditor C for the full settlement of a debt of â‚¹ 31,000. On the due date the bill was dishonoured and C paid â‚¹ 100 as noting charges. On the same date C informed B about the dishonour of the bill. B settled his debt to C by cheque for â‚¹ 30,100 which includes noting charges. A settled B‘s claim by cheque for the same amount.
Record the necessary journal entries in the books of A, B and C for the above transactions and prepare A‘s and C‘s accounts in the books of B, B‘s account in the books of A and also B‘s account in the books of C.
Solution:
Journal Books of B 

Date 
Particulars 
L.F. 
Debit â‚¹ 
Credit â‚¹ 

2017 

March 4 
Aâ€™s A/c 
Dr. 
50,000 

To Sales A/c (Sold goods to A) 
50,000 

March 4 
Cash A/c 
Dr. 
20,000 

Bills Receivable A/c 
Dr. 
30,000 

To Aâ€™s A/c 
50,000 

(Cas received 40% and remaining amount A accepted promissory note) 

March 4 
Câ€™s A/c 
Dr. 
31,000 

To Bills Receivable A/c 
30,000 

To Discount Received A/c 
1,000 

(Promissory note endorsed in favour of C) 

April 6 
Aâ€™s A/c 
Dr. 
30,100 

To C 
30,100 

(On the due date the promissory note was dishonoured and paid noting charges by C) 

April 6 
Câ€™s A/c 
Dr. 
31,100 

To Bank A/c 
30,100 

(Paid cheque to C) 

April 6 
Bank A/c 
Dr. 
30,100 

To Aâ€™s A/c 
30,100 

(Received cheque from A) 
Aâ€™s Account 

Dr. 

Cr. 

Date 
Particulars 
J.F. 
Amount â‚¹ 
Date 
Particulars 
J.F. 
Amount â‚¹ 

2017 
2017 

March4 
Sales A/c 
50,000 
March 4 
Cash A/c 
20,000 

April 6 
Câ€™s A/c 
30,100 
March 4 
Bills Receivable A/c 
30,000 

April 6 
Bank A/c 
30,100 

80,100 
80,100 
Câ€™s Account 

Dr. 

Cr. 

Date 
Particulars 
J.F. 
Amount â‚¹ 
Date 
Particulars 
J.F. 
Amount â‚¹ 

2017 
2017 

March 4 
Bills Receivable A/c 
30,000 
March 4 
Balance b/d 
31,000 

March 4 
Discount Received A/c 
1,000 
April 6 
A 
30,100 

April 6 
Bank A/c 
30,100 

61,100 
61,100 
Journal Books of A 

Date 
Particulars 
L.F. 
Debit Amount (Rs) 
Credit Amount (Rs) 

2017 

March 4 
Purchases A/c 
Dr. 
50,000 

To Bâ€™s A/c 
50,000 

(Purchased goods from B) 

March 4 
Bâ€™s A/c 
Dr. 
50,000 

To Cash A/c 
20,000 

To Bills Payable A/c 
30,000 

(Paid 40% amount in cash and a promissory note was accepted for the remaining amount) 

April 6 
Bills Payable A/c 
Dr. 
30,000 

Noting Charges A/c 
Dr. 
100 

To Bâ€™s A/c 
30,100 

(On the due date, promissory note was dishonoured and paid noting charges) 

April 6 
Bâ€™s A/c 
Dr. 
30,100 

To Bank A/c 
30,100 

(Cheques paid c to B) 
Bâ€™s Account 

Dr. 

Cr. 

Date 
Particulars 
J.F. 
Amount â‚¹ 
Date 
Particulars 
J.F. 
Amountâ‚¹ 

2017 
2017 

March 4 
Cash A/c 
20,000 
March 4 
Purchases A/c 
50,000 

March 4 
Bills Payable A/c 
30,000 
April 6 
Bills Payable A/c 
30,000 

April 6 
Bank A/c 
30,100 
April 6 
Noting Charges A/c 
100 

80,100 
80,100 
Books of C Journal 

Date 
Particulars 
L.F. 
Debit â‚¹ 
Credit â‚¹ 

2017 

March 4 
Bills Receivable A/c 
Dr. 
30,000 

Discount Allowed A/c 
Dr. 
1,000 

To Bâ€™s A/c (Promissory note received from B) 
31,000 

April 6 
Bâ€™s A/c 
Dr. 
30,100 

To Bills Receivable A/c 
Dr. 
30,000 

To Cash A/c 
100 

(On the due date, promissory note was dishonoured and paid noting charges) 

April 6 
Bank A/c 
Dr. 
30,100 

To Bâ€™s A/c 
31,100 

(Received cheque from B) 
Bâ€™s Account 

Dr. 
Cr. 

Date 
Particulars 
J.F. 
Amountâ‚¹ 
Date 
Particulars 
J.F. 
Amount â‚¹ 

2017 
2017 

March 4 
Balance b/d 
31,000 
March 4 
Bills Receivable A/c 
30,000 

April 6 
Bills Receivable A/c 
30,000 
March 4 
Discount Allowed A/c 
1,000 

April 6 
Cash A/c 
100 
April 6 
Bank A/c 
30,100 

61,100 
61,100 
Question 24
On Feb. 01, 2017, Mohan sold goods worth â‚¹ 25,000 to Naresh and drew upon him a bill payable after 90 days. Naresh accepted the bill and Mohan endorsed the bill immediately in favour of his creditor Raja in full settlement of his account of â‚¹ 25,300. One week before the maturity of the bill Naresh requested Mohan to cancel the bill and draw upon him a new bill including interest of â‚¹ 400. Mohan agreed to it. Mohan immediately took the bill from Raja by making the payment to him and then drew upon Naresh a new bill for 30 days which was duly met by Naresh on due date.
Pass necessary entries in the books of Mohan.
Solution:
Journal Books of Mohan 

Date 
Particulars 
L.F. 
Debit â‚¹ 
Credit â‚¹ 

2017 

February 1 
Naresh 
Dr. 
25,000 

To Sales A/c 
25,000 

(Solg goods to Naresh) 

February 1 
Bills Receivable A/c 
Dr. 
25,000 

To Naresh 
25,000 

(Bill accepted by Naresh) 

February 1 
Raja 
Dr. 
25,300 

To Bills Receivable A/c 
25,000 

To Discount Received A/c 
300 

(Bills receivable endorsed in favour of Raja) 

April 27 
Naresh 
Dr. 
25,000 

To Raja 
25,000 

(Cancelled Bills receivable) 

April 27 
Raja 
Dr. 
25,000 

To Cash A/c 
25,000 

(Paid Cash to Raja) 

April 27 
Naresh 
Dr. 
400 

To Interest A/c 
400 

(Due interest to be received) 

April 27 
Bills Receivable A/c 
Dr. 
25,400 

To Naresh 
25,400 

(New bill accepted by Naresh) 

May 30 
Cash A/c 
Dr. 
25,400 

To Bills Receivable A/c 
25,400 

(On the due date bill honoured) 
Question 25
A purchased goods for â‚¹ 15,000 from B on March 01, 2017 and accepted a bill of exchange drawn by B for the same amount. The bill was payable after 60 days. On April 28, B sent the bill to his bank for collection. The bill was duly presented by the bank. A dishonoured the bill and the bank paid â‚¹ 150 as noting charges.
Record the necessary journal entries for the above transactions in the books of A and B.
Solution:
Journal Books of B 

Date 
Particulars 
L.F. 
Debit â‚¹ 
Credit â‚¹ 

2017 

March 1 
Aâ€™s A/c 
Dr. 
15,000 

To Sales A/c 
15,000 

(Sold goods to A) 

March 1 
Bills Receivable A/c 
Dr. 
15,000 

To Aâ€™s A/c 
15,000 

(Bill accepted by A) 

April 28 
Bill Sent for Collection A/c 
Dr. 
15,000 

To Bills Receivable A/c 
15,000 

(Bill sent to the bank for collection) 

May 3 
Aâ€™s A/c 
Dr. 
15,150 

To Bill Sent for Collection A/c 
15,000 

To Bank A/c 
150 

(On the due date, Bill dishonoured and bank paid noting charges) 
Journal Books of A 

Date 
Particulars 
L.F. 
Debit â‚¹ 
Credit â‚¹ 

2017 

March 1 
Purchases A/c 
Dr. 
15,000 

To B 
15,000 

(Purchased goods from B) 

Mar. 01 
Bâ€™s A/c 
Dr. 
15,000 

To Bills Payable A/c 
15,000 

(Bill drawn by B, accepted) 

May 03 
Bills Payable A/c 
Dr. 
15,000 

Noting Charges A/c 
Dr. 
150 

To Bâ€™s A/c 
15,150 

(On the due date, Bill dishonoured and noting charges paid) 
Question 26
Vimal purchased goods â‚¹ 25,000 from Kamal on Jan. 15, 2017 and accepted a bill of exchange drawn upon him by Kamal payable after two months. On the date of maturity the bill was duly presented for payment. Vimal dishonoured the bill.
Record the necessary journal entries in the books of Kamal and Vimal when :
(i) The bill was retained by Kamal till the date of its maturity.
(ii) The bill was immediately discounted by Kamal with is bank @ 6% p.a.
(iii) The bill was endorsed by Kamal in favour of his creditor Sharad.
(iv) Five days before its maturity the bill was sent by Kamal to his bank for collection.
Solution:
Journal Books of Kamal 

Date 
Particulars 
L.F. 
Debit â‚¹ 
Credit â‚¹ 

2017 

January 15 
Vimal 
Dr. 
25,000 

To Sales A/c 
25,000 

(Sold goods to Vimal) 

January 15 
Bills Receivable A/c 
Dr. 
25,000 

To Vimal 
25,000 

(Vimal accepted the bill) 

(i): Bill retained till maturity 

March 18 
Vimal 
Dr. 
25,000 

To Bills Receivable A/c 
25,000 

(On the due date Bill dishonoured) 

(ii): Bill discounted @ 6% p.a.with bank 

January 15 
Bank A/c 
Dr. 
24,750 

Discounting Charges A/c 
Dr. 
250 

To Bills Receivable A/c 
25,000 

(Bill discounted with bank for 2 months @ 6% p.a.) 

March 18 
Vimal 
Dr. 
25,000 

To Bank A/c 
25,000 

(On the due date Bill dishonoured) 

(iii): Bill endorsed in favour of Sharad 

January 15 
Sharad 
Dr. 
25,000 

To Bills Receivable A/c 
25,000 

(Bill endorsed in favour of Sharad) 

March 18 
Vimal 
Dr. 
25,000 

To Sharad 
25,000 

(On the due date Bill dishonoured) 

(iv): Bill sent to bank for collection 

March 13 
Bills Sent for Collection A/c 
Dr. 
25,000 

To Bills Receivable A/c 
25,000 

(Bill sent to the bank for collection) 

March 18 
Vimal 
Dr. 
25,000 

To Bills Sent for Collection A/c 
25,000 

(On the due date Bill dishonoured) 
Journal Books of Vimal 

Date 
Particulars 
L.F. 
Debit â‚¹ 
Credit â‚¹ 

2017 

January 15 
Purchases A/c 
Dr. 
25,000 

To Kamal 
25,000 

(Purchased Goods from Kamal) 

In all the four cases the same entry will be passed 

March 18 
Bills Payable A/c 
Dr. 
25,000 

To Kamal 
25,000 

(On the due date Bill dishonoured) 
Question 27
X draws upon Y a bill of â‚¹ 10,000 for three months on 1st July, 2016. The bill was duly accepted and returned by Y. On due date bill became dishonoured and noting charges paid under each of the following circumstances â‚¹ 75. Pass entries in the following cases:
(i) If drawer retains the bill with him till due date.
(ii) If drawer discounts the same with his Banker and noting charges paid by the Banker.
(iii) If drawer endorses the same to his creditor Z and noting charges paid by Z.
(iv) If drawer sends the bill for collection to his Banker and noting charges paid by the Banker.
Solution:
Journal Books of X 

Date 
Particulars 
L.F. 
Debit â‚¹ 
Credit â‚¹ 

2016 

July 1 
Bills Receivable A/c 
Dr. 
10,000 

To Yâ€™s A/c 
10,000 

(Bill accepted by Y) 

(i): Bill retains till due date 

October 4 
Yâ€™s A/c 
Dr. 
10,075 

To Bills Receivable A/c 
10,000 

To Cash A/c 
75 

(On the due date bill dishonoured and paid noting charges) 

(ii): Bill discounted with the bank 

July 1 
Bank A/c 
Dr. 
10,000 

To Bills Receivable A/c 
10,000 

(Bill discounted with bank) 

October 4 
Yâ€™s A/c 
Dr. 
10,075 

To Bank A/c 
10,075 

(On the due date bill dishonoured and paid noting charges) 

(iii): Bill endorsed to Z 

July 1 
Zâ€™s A/c 
Dr. 
10,000 

To Bills Receivable A/c 
10,000 

(Bill endorsed in favour of Z) 

October 4 
Yâ€™s A/c 
Dr. 
10,075 

To Z 
10,075 

(Bill dishonoured on due date and noting charges paid by Z) 

Case (iv): Bill sent to bank for collection 

July 1 
Bill Sent for Collection A/c 
Dr. 
10,000 

To Bills Receivable A/c 
10,000 

(Bill sent to the bank for collection) 

October 4 
Yâ€™s A/c 
Dr. 
10,075 

To Bill Sent for Collection A/c 
10,000 

To Bank A/c 
75 

(On the due date bill dishonoured and paid noting charges) 

Journal Books of Y 

Date 
Particulars 
L.F. 
Debit â‚¹ 
Credit â‚¹ 

2016 

July 1 
Xâ€™s A/c 
Dr. 
10,000 

To Bills Payable A/c 
10,000 

(Bill drawn by X, accepted) 

Same entry will be passed in both the cases 

October 4 
Bills Payable A/c 
Dr. 
10,000 

Noting Charges A/c 
Dr. 
75 

To Xâ€™s A/c 
10,075 

(On the due date bill dishonoured and noting charges paid) 
Journal Books of Z 

Date 
Particulars 
L.F. 
Debit â‚¹ 
Credit â‚¹ 

2016 

July 01 
Bills Receivable A/c 
Dr. 
10,000 

To Xâ€™s A/c 
10,000 

(Bills receivable, received from X) 

October 4 
Xâ€™s A/c 
Dr. 
10,075 

To Bills Receivable A/c 
10,000 

To Cash A/c 
75 

(On the due date bill dishonoured and noting charges paid) 
Question 28
What Journal entry will be passed in the books of drawer (X) and drawee (Y) at the time of dishonour of bill in the following cases:
(i) If bill of â‚¹ 50,000 was discounted from bank and noting charges paid by the bank was â‚¹ 600.
(ii) If B/R of â‚¹ 50,000 was endorsed in favour of Z. Noting charges paid by Z â‚¹ 600.
(iii) If B/R is returned with drawer and noting charges were â‚¹ 600
Solution:
Xâ€™s Journal 

Sl.no 
Particulars 
L.F. 
Debit â‚¹ 
Credit â‚¹ 

(i) 
Yâ€™s A/c 
Dr. 
50,600 

To Bank A/c 
50,600 

(Bill dishonored and paid noting charges) 

(ii) 
Yâ€™s A/c 
Dr. 
50,600 

To Zâ€™s A/c 
50,600 

(Bill endorsed to Z, dishonored and paid noting charges) 

(iii) 
Yâ€™s A/c 
Dr. 
50,600 

To Bills Receivable A/c 
50,000 

To Cash A/c 
600 

(Bill dishonored and noting charges paid) 

Yâ€™s Journal 

Sl.no 
Particulars 
L.F. 
Debit â‚¹ 
Credit â‚¹ 

(i) 
Bills Payable A/c 
Dr. 
50,000 

Noting Charges A/c 
Dr. 
600 

To Xâ€™s A/c 
50,600 

(Bill dishonored and paid noting charges) 

(ii) 
Bills Payable A/c 
Dr. 
50,000 

Noting Charges A/c 
Dr. 
600 

To Xâ€™s A/c 
50,600 

(Bill dishonored and paid noting charges) 

(iii) 
Bills Payable A/c 
Dr. 
50,000 

Noting Charges A/c 
Dr. 
600 

To Xâ€™s A/c 
50,600 

(Bill dishonored and paid noting charges) 

Question 29
A sold goods to B for â‚¹ 60,000 Charging IGST @18% and immediately drew a bill on B who duly accepted the same. A endorsed the bill to C. C endorsed it to his creditor D. D discounted the bill for â‚¹ 68,000. On the date of maturity, the bill was dishonoured and Bank paid noting charges amounting to â‚¹ 200.
Show Journal entries in the books of all the parties to record these transactions.
Solution:
Journal Books of A 

Sl.no 
Particulars 
L.F. 
Debit â‚¹ 
Credit â‚¹ 

i 
Bâ€™s A/c 
Dr. 
70,800 

To Sales A/c 
60,000 

To Output IGST A/c 
10,800 

(Sold goods to B @ 18% Interstate GST) 

ii 
Bills Receivable A/c 
Dr. 
70,800 

To Bâ€™s A/c 
70,800 

(B accepted the bill) 

iii 
Câ€™s A/c 
Dr. 
70,800 

To Bills Receivable A/c 
70,800 

(Bill endorsed in favour of C) 

iv 
Bâ€™s A/c 
Dr. 
71,000 

To Câ€™s A/c 
71,000 

(On the due date, bills dishonoured and noting charges receivable from B and payable to C) 
Journal Books of B 

Date 
Particulars 
L.F. 
Debit â‚¹ 
Credit â‚¹ 

Purchases A/c 
Dr. 
60,000 

Input IGST A/c 
Dr. 
10,800 

To Aâ€™s A/c 
70,800 

(Purchased goods from A) 

Aâ€™s A/c 
Dr. 
70,800 

To Bills Payable A/c 
70,800 

(Bill drawn by A, accepted) 

Bills Payable A/c 
Dr. 
70,800 

Noting Charges A/c 
Dr. 
200 

To Aâ€™s A/c 
71,000 

(On the due date, bill dishonoured and paid noting charges) 
Journal Books of C 

Date 
Particulars 
L.F. 
Debit â‚¹ 
Credit â‚¹ 

Bills Receivable A/c 
Dr. 
70,800 

To Aâ€™s A/c 
70,800 

(Bills receivable, received from A) 

Dâ€™s A/c 
Dr. 
70,800 

To Bills Receivable A/c 
70,800 

(Bill endorsed in favour of D) 

Aâ€™s A/c 
Dr. 
71,000 

To Dâ€™s A/c 
71,000 

(Bill dishonoured on due date and noting charges receivable from A and payable to D) 
Journal Books of D 

Date 
Particulars 
L.F. 
Debit â‚¹ 
Credit â‚¹ 

Bills Receivable A/c 
Dr. 
70,800 

To Câ€™s A/c 
70,800 

(Bills receivable, received from C) 

Bank A/c 
Dr. 
68,000 

Discounting Charges A/c 
Dr. 
2,800 

To Bills Receivable A/c 
70,800 

(Bill discounted with bank) 

Câ€™s A/c 
Dr. 
71,000 

To Bank A/c 
71,000 

(On the due date, bill dishonoured and bank paid noting charges) 
Question 30
On 1st Jan., 2016, Satish drew on Harish three bills of exchange in full settlement of claims, the first for â‚¹ 14,000 at one month; the second for â‚¹ 16,000 at two months and the third for â‚¹ 18,000 at three months. The bills were duly accepted by Harish. The first bill was endorsed by Satish to his creditor Rajnish on 3rd Jan., 2016.
The second bill was discounted on 15th Jan. for â‚¹ 15,900 and the third bill was sent to bank for collection on 4th Feb. All the bills were met on maturity except the second bill which was dishonoured, noting charges being paid â‚¹ 240. Satish charged â‚¹ 300 for interest from Harish and drew on him a fourth bill for two months for â‚¹ 16,540. The fourth bill was duly met on maturity.
Give Journal entries in the books of Satish and Harish.
Solution:
Journal Books of Satish 

Date 
Particulars 
L.F. 
Debit â‚¹ 
Credit â‚¹ 

2016 

January 1 
Bills Receivable A/c (1) 
Dr. 
14,000 

Bills Receivable A/c (2) 
Dr. 
16,000 

Bills Receivable A/c (3) 
Dr. 
18,000 

To Harish 
48,000 

(Bills accepted by Harish) 

January 3 
Rajnish 
Dr. 
14,000 

To Bills Receivable A/c (1) 
14,000 

(Bill endorsed in favour of Rajnish) 

January 15 
Bank A/c 
Dr. 
15,900 

Discounting Charges A/c 
Dr. 
100 

To Bills Receivable A/c (2) 
16,000 

(Bills discounted with bank @ Rs 100 discount) 

February 4 
Bill Sent for Collection A/c 
Dr. 
18,000 

To Bills Receivable A/c (3) 
18,000 

(Bill sent to the bank for collection) 

March 4 
Harish 
Dr. 
16,240 

To Bank A/c 
16,240 

(On the due date, bill dishonoured and paid noting charges) 

March 4 
Harish 
Dr. 
300 

To Interest A/c 
300 

(Due interest to be received) 

March 4 
Bills Receivable A/c (4) 
Dr. 
16,540 

To Harish 
16,540 

(New bill accepted by Harish) 

April 4 
Bank A/c 
Dr. 
18,000 

To Bills Sent for Collection A/c 
18,000 

(On the due date, bill dishonoured) 

May 7 
Cash A/c 
Dr. 
16,540 

To Bills Receivable A/c (4) 
16,540 

(On the due date, bill dishonoured) 
Books of Harish Journal 

Date 
Particulars 
L.F. 
Debit â‚¹ 
Creditâ‚¹ 

2016 

January 1 
Satish 
Dr. 
48,000 

To Bills Payable A/c (1) 
14,000 

To Bills Payable A/c (2) 
16,000 

To Bills Payable A/c (3) 
18,000 

(Bill drawn by Satish, accepted) 

February 4 
Bills Payable A/c (1) 
Dr. 
14,000 

To Cash A/c 
14,000 

(On the due date, bill honoured) 

March 4 
Bills Payable A/c (2) 
Dr. 
16,000 

Noting Charges A/c 
Dr. 
240 

To Satish 
16,240 

(On the due date, bill honoured and paid noting charges) 

March 4 
Interest A/c 
Dr. 
300 

To Satish 
300 

(Due interest to be paid) 

March 4 
Satish 
Dr. 
16,540 

To Bills Payable A/c (4) 
16,540 

(New bill drawn by Satish, accepted) 

April 4 
Bills Payable A/c (3) 
Dr. 
18,000 

To Cash A/c 
18,000 

(On the due date, bill honoured) 

May 7 
Bills Payable A/c (4) 
Dr. 
16,540 

To Cash A/c 
16,540 

(On the due date, bill honoured) 
Question 31
A sold goods to B on 30th October, 2016 for â‚¹ 14,000 and received three bills for â‚¹ 2,000, â‚¹ 4,000 and â‚¹ 8,000 at 2, 3 and 4 months duration respectively. He kept the first bill till maturity; endorsed the 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 â‚¹ 40 as noting charges. On 3rd March, 2017, B paid â‚¹ 3,000 and the noting charges in cash and accepted a new bill at 3 months after the date for the balance plus â‚¹ 150 as interest. The new bill was met on maturity. Give Journal entries in the books of A and B both.
Solution:
Journal Books of A 

Date 
Particulars 
L.F. 
Debit â‚¹ 
Credit â‚¹ 

2016 

October 30 
Bâ€™s A/c 
Dr. 
14,000 

To Sales A/c 
14,000 

(Goods sold to B) 

October 30 
Bills Receivable A/c (1) 
Dr. 
2,000 

Bills Receivable A/c (2) 
Dr. 
4,000 

Bills Receivable A/c (3) 
Dr. 
8,000 

To Bâ€™s A/c 
14,000 

(B accepted bills) 

October 30 
Câ€™s A/c 
Dr. 
4,000 

To Bills Receivable A/c (2) 
4,000 

(Bill endorsed in favour of C) 

December3 
Bank A/c 
Dr. 
7,640 

Discounting Charges A/c 
Dr. 
360 

To Bills Receivable A/c (3) 
8,000 

(Bill discounted with the bank for 3 months @ 18 p.a.) 

2017 

January 2 
Cash A/c 
Dr. 
2,000 

To Bills Receivable A/c (1) 
2,000 

(On the due date, bill honoured) 

March 3 
Bâ€™s A/c 
Dr. 
8,040 

To Bank A/c 
8,040 

(On the due date, bill honoured and bank paid noting charges) 

March 3 
Cash A/c 
Dr. 
3,040 

To Bâ€™s A/c 
3,040 

(Received cash from B) 

March 3 
Bâ€™s A/c 
Dr. 
150 

To Interest A/c 
150 

(Due interest to be received) 

March 3 
Bills Receivable A/c 
Dr. 
5,150 

To Bâ€™s A/c 
5,150 

(New bill accepted by B) 

June 06 
Cash A/c 
Dr. 
5,150 

To Bills Receivable A/c 
5,150 

(On the due date, bill honoured) 
Journal Books of B 

Date 
Particulars 
L.F. 
Debit â‚¹ 
Credit â‚¹ 

2016 

October 30 
Purchases A/c 
Dr. 
14,000 

To A 
14,000 

(Goods purchased from A) 

October 30 
A 
Dr. 
14,000 

To Bills Payable A/c (1) 
2,000 

To Bills Payable A/c (2) 
4,000 

To Bills Payable A/c (3) 
8,000 

(Bill drawn by A, accepted) 

2017 

January 2 
Bills Payable A/c (1) 
Dr. 
2,000 

To Cash A/c 
2,000 

(Bill honoured on due date) 

February 2 
Bills Payable A/c (2) 
Dr. 
4,000 

To Cash A/c 
4,000 

(On the due date, bill honoured) 

March 3 
Bills Payable A/c (3) 
Dr. 
8,000 

Noting Charges A/c 
Dr. 
40 

To A 
8,040 

(On the due date, bill honoured and noting charges paid) 

March 3 
A 
Dr. 
3,040 

To Cash A/c 
3,040 

(Paid cash to A) 

March 3 
Interest A/c 
Dr. 
150 

To A 
150 

(Due interest to be paid) 

March 3 
A 
Dr. 
5,150 

To Bills Payable A/c 
5,150 

(Bill drawn by A, accepted) 

June 6 
Bills Payable A/c 
Dr. 
5,150 

To Cash A/c 
5,150 

(On the due date, bill honoured) 
Working Note: Evaluating discounting charges
Discounting charges = 8,000 X \(\frac{18}{100}\) X \(\frac{3}{12}\) = â‚¹ 360
Question 32
On 1st January, 2010, Arun purchased from Barun goods invoiced at â‚¹ 10,000. On the same date, Barun drew upon Arun a bill for the amount at 2 months and Arun accepted the same. On 4th January, 2010, Barun got the bill discounted with his bank @12% per annum. On due date, Arun told Barun that he was not in a position to pay the full amount and requested Barun to accept â‚¹ 5,000 in cash and draw a fresh bill at 2 months for the remaining amount plus interest at 15% per annum, Barun agreed. The second bill was duly met on the due date.
Give journal entries to record the above transactions in the books of Barun.
Solution:
Journal Books of Barun 

Date 
Particulars 
L.F. 
Debit â‚¹ 
Credit â‚¹ 

2010 

January 1 
Arun 
Dr. 
10,000 

To Sales A/c 
10,000 

(Sold goods to Arun) 

January 1 
Bills Receivable A/c 
Dr. 
10,000 

To Arun 
10,000 

(Arun accepted the bill) 

January 4 
Bank A/c 
Dr. 
9,800 

Discounting Charges A/c 
Dr. 
200 

To Bills Receivable A/c 
10,000 

(Bill discounted with the bank for 2 months @ 12% p.a.) 

Mach 4 
Arun 
Dr. 
10,000 

To Bank A/c 
10,000 

(On the due date bill cancelled) 

March 4 
Cash 
Dr. 
5,000 

To Arun 
5,000 

(Received cash from Arun) 

March 4 
Arun 
Dr. 
125 

To Interest A/c 
125 

(Due interest to be received) 

March 4 
Bills Receivable A/c 
Dr. 
5,125 

To Arun 
5,125 

(New bill accepted by Arun) 

May 7 
Cash A/c 
Dr. 
5,125 

To Bills Receivable A/c 
5,125 

(On the due date, bill honoured) 
Working Note 1: Evaluating discounting charges
Discounting charges = â‚¹10,000 X \(\frac{12}{100}\) X \(\frac{2}{12}\) = â‚¹ 200
Working Note 2: Evaluating amount of interest
Amount of Interest = â‚¹5,000 X \(\frac{15}{100}\) X \(\frac{2}{12}\) = â‚¹ 125
Question 33
Darshan sold goods for â‚¹ 40,000 to Varun on 8.1.2017 and drew upon him a bill of exchange payable after two months. Varun accepted the bill and returned the same to Darshan. On the due date the bill was met by Varun. Record the necessary Journal entries in the books of Darshan and Varun in the following circumstances:
1. When the bill was retained by Darshan till the date of its maturity.
2. When Darshan immediately discounted the bill @6% p.a. with his bank.
3. When the bill was endorsed immediately by Darshan in favour of his creditor Suresh.
4. When three days before its maturity, the bill was sent by Darshan to his bank for collection.
Solution:
Journal Books of Darshan 

Date 
Particulars 
L.F. 
Debit â‚¹ 
Credit â‚¹ 

2017 

January 8 
Varun 
Dr. 
40,000 

To Sales A/c 
40,000 

(Sold goods to Varun) 

January 8 
Bills Receivable A/c 
Dr. 
40,000 

To Varun 
40,000 

(Varun accepted the bill) 

1 : Bill retained till maturity 

March 11 
Cash A/c 
Dr. 
40,000 

To Bills Receivable A/c 
40,000 

(On the due date, bill honoured) 

2: Bill discounted with the bank 

January 8 
Bank A/c 
Dr. 
39,600 

Discounting Charges A/c 
Dr. 
400 

To Bills Receivable A/c 
40,000 

(Bills discounted with the bank for 2 months @ 6% p.a.) 

3: Bill endorsed in favour of Suresh 

January 8 
Suresh 
Dr. 
40,000 

To Bills Receivable A/c 
40,000 

(Bill endorsed in favour of Suresh) 

4: Bill sent to bank for collection 

March 11 
Bill Sent for Collection A/c 
Dr. 
40,000 

To Bills Receivable A/c 
40,000 

(Bills sent to bank for payment) 

March 11 
Bank A/c 
Dr. 
5,125 

To Bill Sent for Collection A/c 
5,125 

(On the due date, bill honoured) 
Journal Books of Varun 

Date 
Particulars 
L.F. 
Debit â‚¹ 
Credit â‚¹ 

2017 

January 8 
Purchases A/c 
Dr. 
40,000 

To Darshan 
40,000 

(Purchased goods from Darshan) 

January 8 
Darshan 
Dr. 
40,000 

To Bills Payable A/c 
40,000 

(Bill drawn by Darshan, accepted) 

In all four cases same entry will be passed 

March 11 
Bills Payable A/c 
Dr. 
40,000 

To Cash A/c 
40,000 

(On the due date, bill honoured) 
Working Note: Evaluating discounting Charges
Discounting charges = â‚¹40,000 X \(\frac{6}{100}\) X \(\frac{2}{12}\) = â‚¹ 400
Question 34
On Jan. 1, 2017 Neha sold goods for â‚¹ 20,000 to Muskan and drew upon her a bill of exchange payable after two months. One month before the maturity of the bill Muskan approached Neha to accept the payment against the bill at a rebate @12% p.a. Neha agreed to the request of Muskan and Muskan retired the bill under the agreed rate of rebate.
Journalise the above transactions in the books of Neha and Muskan.
Solution:
Journal Books of Neha 

Date 
Particulars 
L.F. 
Debit â‚¹ 
Credit â‚¹ 

2017 

January 1 
Muskan 
Dr. 
20,000 

To Sales A/c 
20,000 

(Sold goods to Muskan) 

January 1 
Bills Receivable A/c 
Dr. 
20,000 

To Muskan 
20,000 

(Muskan accepted the bill) 

February 4 
Cash A/c 
Dr. 
19,800 

Rebate A/c 
Dr. 
200 

To Bills Receivable A/c 
20,000 

(Bill retired under the rebate @ 12% p.a. for 1 month) 
Journal Books of Muskan 

Date 
Particulars 
L.F. 
Debit â‚¹ 
Credit â‚¹ 

2017 

January 1 
Purchases A/c 
Dr. 
20,000 

To Neha 
20,000 

(Purchased goods from Neha) 

January 1 
Neha 
Dr. 
20,000 

To Bills Payable A/c 
20,000 

(Bill drawn by Neha, accepted) 

February 4 
Bills Payable A/c 
Dr. 
20,000 

To Cash A/c 
19,800 

To Rebate A/c 
200 

(Bill retired before one month under the rebate of 12% p.a.) 
Working Note: Evaluating amount of Rebate
Amount of Rebate= 20,000X \(\frac{12}{100}\) X \(\frac{1}{12}\) = â‚¹ 200
Question 35
Leena sold goods to Meena on March 01, 2009 for â‚¹ 68,000 and drew two bills of exchange of the equal amount upon Meena payable after three months. Leena immediately discounted the first bill with her bank at 12% p.a. The bill was dishonoured by Meena and Bank paid â‚¹ 55 as noting charges.
The second bill was retired on May 04, 2009 under a rebate of 6% p.a. with mutual agreement.
Journalise the above in the books of Leena and Meena.
Solution:
Journal Books of Leena 

Date 
Particulars 
L.F. 
Debit â‚¹ 
Credit â‚¹ 

2009 

March 1 
Meena 
Dr. 
68,000 

To Sales A/c 
68,000 

(Sold goods to Meena) 

March 1 
Bills Receivable A/c (1) 
Dr. 
34,000 

Bills Receivable A/c (2) 
Dr. 
34,000 

To Meena 
68,000 

(Meena accepted bills) 

March 1 
Bank A/c 
Dr. 
32,980 

Discounting Charges A/c 
Dr. 
1,020 

To Bills Receivable A/c 
34,000 

(Bill discounted for 3 months with bank @ 12% p.a.) 

May 4 
Cash A/c 
Dr. 
33,830 

Rebate A/c 
Dr. 
170 

To Bills Receivable A/c (2) 
34,000 

(Bill retired for 1 month under the rebate of 6% p.a.) 

June 4 
Meena 
Dr. 
34,055 

To Bank A/c 
34,055 

(On the due date, bill dishonoured and bank paid noting charges) 
Journal Books of Meena 

Date 
Particulars 
L.F. 
Debit â‚¹ 
Creditâ‚¹ 

2009 

March 1 
Purchases A/c 
Dr. 
68,000 

To Leena 
68,000 

(Purchased goods from Leena) 

March 1 
Leena 
Dr. 
68,000 

To Bills Payable A/c (1) 
34,000 

To Bills Payable A/c (2) 
34,000 

(Bills drawn by Leena, accepted) 

May 4 
Bills Payable A/c (2) 
Dr. 
34,000 

To Cash A/c 
33,830 

To Rebate A/c 
170 

(Bill retired for 1 month under the rebate of 6% p.a.) 

June 4 
Bills Payable A/c (1) 
Dr. 
34,000 

Noting Charges A/c 
Dr. 
55 

To Leena 
34,055 

(On the due date,bill dishonoured and paid noting charges) 
Working Notes 1: Evaluating discounting charges
Discounting charges = â‚¹34,000 X \(\frac{12}{100}\) X \(\frac{3}{12}\) = â‚¹ 1,020
Working Notes 2: Evaluating amount of rebate
Amount of rebate = â‚¹34,000 X \(\frac{6}{100}\) X \(\frac{1}{12}\) = â‚¹ 170
Question 36
Anita purchased goods for â‚¹ 23,000 from Kavita on October 15, 2009 and accepted a bill of exchange drawn upon her by Kavita payable after two months. On the date of maturity the bill was duly presented for payment. Anita dishonoured the bill. The payee noted with â‚¹ 95 as noting charges.
Record the necessary journal entries in the books of Kavita and Anita, when (a) The bill was immediately discounted by Kavita with her Bank @ 9% p.a. (b) The bill was endorsed by Kavita in favour of her creditor Shankar after one month.
Solution:
Journal Books of Kavita 

Date 
Particulars 
L.F. 
Debit â‚¹ 
Credit â‚¹ 

2009 

October 15 
Anita 
Dr. 
23,000 

To Sales A/c 
23,000 

(Sold goods to Anita) 

October 15 
Bills Receivable A/c 
Dr. 
23,000 

To Anita 
23,000 

(Anita accepted the bill) 

(a): Bill discounted with the bank 

October 15 
Bank A/c 
Dr. 
22,655 

Discounting Charges A/c 
Dr. 
345 

To Bills Receivable A/c 
23,000 

(Bills discounted for 2 months with the bank @ 9% p.a.) 

December 18 
Anita 
Dr. 
23,095 

To Bank A/c 
23,095 

(On the due date, bill dishonoured and bank paid noting charges) 

(b): Bill endorsed in favour of Shankar 

October 15 
Shankar 
Dr. 
23,000 

To Bills Receivable A/c 
23,000 

(Bill endorsed in favour of Shankar) 

December 18 
Anita 
Dr. 
23,095 

To Shankar 
23,095 

(On the due date, bill dishonoured and noting charges are payable by Anita and receivable by Shankar) 
Journal Books of Anita 

Date 
Particulars 
L.F. 
Debit â‚¹ 
Credit â‚¹ 

2009 

October 15 
Purchases A/c 
Dr. 
23,000 

To Kavita 
23,000 

(Purchased goods from Kavita) 

October 15 
Kavita 
Dr. 
23,000 

To Bills Payable A/c 
23,000 

(Bill drawn by Kavita, accepted) 

In both cases, the same entry will be passed 

December 18 
Bills Payable A/c 
Dr. 
23,000 

Noting Charges A/c 
Dr. 
95 

To Kavita 
23,095 

(On the due date, bill dishonoured and paid noting charges) 
Working Note: Evaluation of Discounting Charges
Discounting charges = â‚¹23,000 X \(\frac{9}{100}\) X \(\frac{2}{12}\) = â‚¹ 345
Question 37
Abdulla sold goods to Tahir on Jan. 17, 2017 for â‚¹ 18,000. He drew a bill of exchange for the same amount on Tahir for 45 days. On the same date Tahir accepted the bill and returned it to Abdulla. On the due date Abdulla presented the bill to Tahir which was dishonoured. Abdulla paid â‚¹ 40 as noting charges. Five days after the dishonour of his acceptance Tahir settled his debt by making a payment of â‚¹ 18,700 including interest and noting charges.
Record the necessary journal entries in the books of Abdulla and Tahir. Also prepare Tahir’s account in the books of Abdulla and Abdulla’s account in the books of Tahir.
Solution:
Journal Books of Abdulla 

Date 
Particulars 
L.F. 
Debit â‚¹ 
Credit â‚¹ 

2017 

January 17 
Tahir 
Dr. 
18,000 

To Sales A/c 
18,000 

(Sold goods to Tahir) 

January 17 
Bills Receivable A/c 
Dr. 
18,000 

To Tahir 
18,000 

(Bill accepted by Tahir) 

March 6 
Tahir 
Dr. 
18,040 

To Bills Receivable A/c 
18,000 

To Cash A/c 
40 

(On the due date, bill dishonoured and paid noting charges) 

March 11 
Tahir (18,700 â€“ 18,040) 
Dr. 
660 

To Interest A/c 
660 

(Due interest to be received) 

March 11 
Cash A/c 
Dr. 
18,700 

To Tahir 
18,700 

(Received cash from Tahir) 
Tahirâ€™s Account 

Dr. 

Cr. 

Date 
Particulars 
J.F. 
Amount â‚¹ 
Date 
Particulars 
J.F. 
Amountâ‚¹ 

2017 
2017 

January 17 
Sales A/c 
18,000 
January 17 
Bills Receivable A/c 
18,000 

March 6 
Bills Receivable A/c 
18,000 
March 11 
Cash A/c 
18,700 

March 6 
Cash A/c 
40 

March 11 
Interest A/c 
660 

36,700 
36,700 
Journal Books of Tahir 

Date 
Particulars 
L.F. 
Debit â‚¹ 
Credit â‚¹ 

2017 

January 1 
Purchases A/c 
Dr. 
18,000 

To Abdulla 
18,000 

(Purchased goods from Abdulla) 

January 1 
Abdulla 
Dr. 
18,000 

To Bills Payable A/c 
18,000 

(Bill drawn by Abdulla, accepted) 

March 6 
Bills Payable A/c 
Dr. 
18,000 

Noting Charges A/c 
Dr. 
40 

To Abdulla 
18,040 

(On the due date, bill dishonoured and paid noting charges) 

March 11 
Interest A/c (18,700 â€“ 18,040) 
Dr. 
660 

To Abdulla 
660 

(Interest due to be paid) 

March 11 
Abdulla 
Dr. 
18,700 

To Cash A/c 
18,700 

(Cash paid to Abdulla) 
Abdullaâ€™s Account 

Dr. 

Cr. 

Date 
Particulars 
J.F. 
Amount â‚¹ 
Date 
Particulars 
J.F. 
Amountâ‚¹ 

2017 
2017 

January 17 
Bills Payable A/c 
18,000 
January 17 
Purchases A/c 
18,000 

March 11 
Cash A/c 
18,700 
March 6 
Bills Payable A/c 
18,000 

March 6 
Noting Charges A/c 
40 

March 11 
Interest A/c 
660 

36,700 



36,700 
Question 38
X sold goods to Y on 1.3.2017 for â‚¹ 12,000 and drew upon Y a bill of exchange for the same amount payable after two months. X immediately discounted the bill with his bank at 9% p.a. The maturity date of the bill was a non business day (holiday), therefore, X had to present the bill as per the provisions of the Indian Instruments Act, 1881. The bill was dishonoured by Y and X paid â‚¹ 45 as noting charges. Y settled the claim of X five days after the dishonour of the bill by a cheque which included interest @ 12% for the term of the bill.
Journalise the above transactions in the books of X and Y and prepare Y‘s account in the books of X and X‘s account in the books of Y.
Solution:
Journal Books of X 

Date 
Particulars 
L.F. 
Debit â‚¹ 
Credit â‚¹ 

2017 

March 1 
Y 
Dr. 
12,000 

To Sales A/c 
12,000 

(Sold goods to Y) 

March 1 
Bills Receivable A/c 
Dr. 
12,000 

To Y 
12,000 

(Y accepted the bill) 

March 1 
Bank A/c 
Dr. 
11,820 

Discounting Charges A/c 
Dr. 
180 

To Bills Receivable A/c 
12,000 

(Bills discounted for 2 month with the bank @ 9% p.a.) 

May 3 
Y 
Dr. 
12,045 

To Bank A/c 
12,045 

(On the due date, bills dishonoured and paid noting charges) 

May 8 
Y 
Dr. 
241 

To Interest A/c 
241 

(Due interest to be received) 

May 8 
Bank A/c 
Dr. 
12,286 

To Y 
12,286 

(Received cheque from Y) 
Yâ€™s Account 

Dr. 

Cr. 

Date 
Particulars 
J.F. 
Amount â‚¹ 
Date 
Particulars 
J.F. 
Amount â‚¹ 

2017 
2017 

March 1 
Sales A/c 
12,000 
March 1 
Bills Receivable A/c 
12,000 

May 3 
Bank A/c 
12,045 
May 8 
Bank A/c 
12,286 

May 8 
Interest A/c 
241 

24,286 
24,286 
Journal Books of Y 

Date 
Particulars 
L.F. 
Debit â‚¹ 
Credit â‚¹ 

2017 

March 1 
Purchases A/c 
Dr. 
12,000 

To X 
12,000 

(Purchased goods from X) 

March 1 
X 
Dr. 
12,000 

To Bills Payable A/c 
12,000 

(Bill drawn by X, accepted) 

May 3 
Bills Payable A/c 
Dr. 
12,000 

Noting Charges A/c 
Dr. 
45 

To X 
12,045 

(On the due date, bill dishonoured and paid noting charges) 

May 8 
Interest A/c 
Dr. 
241 

To X 
241 

(Due interest to be paid) 

May 8 
X 
Dr. 
12,286 

To Bank A/c 
12,286 

(Issued cheque from X) 
Xâ€™s Account 

Dr. 

Cr. 

Date 
Particulars 
J.F. 
Amount â‚¹ 
Date 
Particulars 
J.F. 
Amount â‚¹ 

2017 
2017 

March 1 
Bills Payable A/c 
12,000 
March1 
Purchases A/c 
12,000 

May 8 
Bank A/c 
12,286 
May 3 
Bills Payable A/c 
12,000 

May 3 
Noting Charges A/c 
45 

May 8 
Interest A/c 
241 

24,286 
24,286 
Working Notes 1: Evaluating discounting charges
Discounting charges = â‚¹12,000 X \(\frac{9}{100}\) X \(\frac{2}{12}\) = â‚¹ 180
Working Notes 2: Evaluating Amount of Interest
Amount of Interest = â‚¹12,045 X \(\frac{12}{100}\) X \(\frac{2}{12}\) = â‚¹ 241
Note: In this account, since the due date May 4, 2017 falls on a holiday, so the due date will be on the preceding date i.e May 03, 2017.
Question 39
On 1st February 2018, A sold goods to B for â‚¹ 40,000 Charging CGST and SGST @ 9% each. B pays â‚¹ 17,200 in cash and accepted a three months bill for the balance. On the due date, B expressed his inability to meet the bill and offered â‚¹ 12,000 in cash and to accept a new bill for one month for the balance plus interest at 18% p.a. A agrees to the proposal. On the due date the bill was duly honoured by B. Pass entries in the books of A and B.
Solution:
Journal Books of A 

Date 
Particulars 
L.F. 
Debit â‚¹ 
Credit â‚¹ 

2018 

February 1 
B A/c 
Dr. 
47,200 

To Sales A/c 
40,000 

To Output CGST A/c 
3,600 

To Output SGST A/c 
3,600 

(Sold goods to B @ 9% intrastate GST) 

February 1 
Cash A/c 
Dr. 
17,200 

Bills Receivable A/c 
Dr. 
30,000 

To Bâ€™s A/c 
40,000 

(Received â‚¹ 17,200 in cash from B and remaining amount accepted by bill) 

May 4 
B A/c 
Dr. 
30,000 

To Bills Receivable A/c 
30,000 

(On the due date, bill cancelled) 

May 4 
Cash 
Dr. 
12,000 

To Bâ€™s A/c 
12,000 

(Received â‚¹ 12,000 in cash from B) 

May 04 
B A/c 
Dr. 
270 

To Interest A/c 
270 

(Due interest to be received) 

May 04 
Bills Receivable A/c 
Dr. 
18,270 

To Bâ€™s A/c 
18,270 

(New bill accepted by B) 

June 07 
Cash A/c 
Dr. 
18,270 

To Bills Receivable A/c 
18,270 

(On the due date, bill honoured) 
Books of B Journal 

Date 
Particulars 
L.F. 
Debit â‚¹ 
Credit â‚¹ 

2018 

February 1 
Purchases A/c 
Dr. 
40,000 

Input CGST A/c 
Dr. 
3,600 

Input SGST A/c 
Dr. 
3,600 

To A 
47,200 

(Purchased goods from A) 

February 1 
A 
Dr. 
47,200 

To Cash A/c 
17,200 

To Bills Payable A/c 
30,000 

(Paid â‚¹ 17,200 in cash and accepted remaining amount by bill) 

May 4 
Bills Payable A/c 
Dr. 
30,000 

To A 
30,000 

(On the due date, bill cancelled) 

May 4 
A 
Dr. 
12,000 

To Cash A/c 
12,000 

(Paid â‚¹12,000 in cash to A) 

May 04 
Interest A/c 
Dr. 
270 

To A 
270 

(Due interest to be paid) 

May 04 
A 
Dr. 
18,270 

To Bills Payable A/c 
18,270 

(New Bill drawn by A, accepted) 

June 07 
Bills Payable A/c 
Dr. 
18,270 

To Cash A/c 
18,270 

(On the due date, bill honoured) 
Working Note: Evaluating amount of Interest
Amount of Interest: â‚¹18,000 X \(\frac{18}{100}\) X \(\frac{1}{12}\) = â‚¹ 270
Question 40
and the second for two months. The first bill was met on due date but on the due date of the second bill, Y requested that the bill be renewed for a further period of two months. X agreed provided that interest at 15% p.a. was paid immediately in cash. Y agreed to this. The second bill was met on the due date.
Give journal entries in the books of X and Y.
Solution:
Journal Books of X 

Date 
Particulars 
L.F. 
Debit â‚¹ 
Credit â‚¹ 

2018 

January 15 
Y 
Dr. 
56,000 

To Sales A/c 
50,000 

To Output IGST A/c 
6,000 

(Sold goods to Y @ 12% interstate GST) 

January 15 
Bills Receivable A/c (1) 
Dr. 
25,000 

Bills Receivable A/c (2) 
Dr. 
25,000 

Cash A/c 
Dr. 
6,000 

To Y 
56,000 

(Y accepted bills) 

February 18 
Cash A/c 
Dr. 
25,000 

To Bills Receivable A/c (1) 
25,000 

(On the due date, bill honoured) 

March 18 
Y 
Dr. 
25,000 

To Bills Receivable A/c (2) 
25,000 

(On the due date, bill honoured cancelled) 

March 18 
Y 
Dr. 
625 

To Interest A/c 
625 

(Due interest to be paid) 

March 18 
Cash A/c 
Dr. 
625 

Bills Receivable A/c 
Dr. 
25,000 

To Y 
25,625 

(Received interest in cash by Y and also a bill accepted by him) 

May 21 
Cash A/c 
Dr. 
25,000 

To Bills Receivable A/c 
25,000 

(On the due date, bill honoured) 
Journal Books of Y 

Date 
Particulars 
L.F. 
Debit â‚¹ 
Credit â‚¹ 

2018 

January 15 
Purchases A/c 
Dr. 
50,000 

Input IGST A/c 
Dr. 
6,000 

To X 
56,000 

(Purchased goods from X) 

January 15 
X 
Dr. 
56,000 

To Bills Payable A/c (1) 
25,000 

To Bills Payable A/c (2) 
25,000 

To Cash A/c 
6,000 

(X withdrew bills, accepted) 

February 18 
Bills Payable A/c (1) 
Dr. 
25,000 

To Cash A/c 
25,000 

(On the due date, bill honoured) 

March 18 
Bills Payable A/c (2) 
Dr. 
25,000 

To X 
25,000 

(On the due date, bill cancelled) 

March 18 
Interest A/c 
Dr. 
625 

To X 
625 

(Due interest paid) 

March 18 
X 
Dr. 
25,625 

To Cash A/c 
625 

To Bills Payable A/c 
25,000 

(Paid Interest in cash and X drew a new bill was accepted) 

May 21 
Bills Payable A/c 
Dr. 
25,000 

To Cash A/c 
25,000 

(On the due date, bill honoured) 
Working Note: Evaluating amount of Interest
Discounting charges = â‚¹25,000 X \(\frac{15}{100}\) X \(\frac{2}{12}\) = â‚¹ 625
Question 41
On 1st January 2017, Amar sold goods to Akbar for â‚¹ 60,000. Akbar accepts two bills of â‚¹ 25,000 for 2 months, and â‚¹ 35,000 for 3 months.
The first bill was discounted from bank on 3rd January 2017 for â‚¹ 24,900 and 2nd bill endorsed to Anthony on 15th January 2017.
First bill was met on maturity but second bill got dishonoured and noting charges of â‚¹ 200 being paid. Amar charged â‚¹ 300 as Interest and drew another bill for the amount due for further 2 months. This bill was met on maturity.
Pass the necessary Journal Entries in the books of Amar, Akbar and Anthony.
Solution:
Journal books of Amar (Drawer) 

Date 
Particulars 
L.F. 
Debit â‚¹ 
Credit â‚¹ 

2017 

January 1 
Akbarâ€™s A/c 
Dr. 
60,000 

To Sales A/c 
60,000 

(Sold goods to Akbar) 

January 1 
Bills Receivable I A/c 
Dr. 
25,000 

Bills Receivable II A/c 
Dr. 
35,000 

To Amarâ€™s A/c 
60,000 

(Received bill) 

January 3 
Bank A/c 
Dr. 
24,900 

Discounting Charges A/c 
Dr. 
100 

To Bills ReceivableI A/c 
25,000 

(Discounted bill) 

January 15 
Anthonyâ€™s A/c 
Dr. 
35,000 

To Bills Receivable II A/c 
35,000 

(Bill endorsed) 

April 4 
Akbarâ€™s A/c 
Dr. 
35,200 

To Anthonyâ€™s A/c 
35,200 

(Bill got dishonoured) 

April 4 
Akbarâ€™s A/c 
Dr. 
300 

To Interest A/c 
300 

(Due interest) 

April 4 
Bill Receivable A/c 
Dr. 
35,500 

To Amarâ€™s A/c 
35,500 

(New bill received from Akbar) 

June 7 
Cash A/c 
Dr. 
35,500 

To Bills Receivable A/c 
35,500 

(New bill met on maturity) 
Journal books of Akbar (Drawee) 

Date 
Particulars 
L.F. 
Debit â‚¹ 
Credit â‚¹ 

2017 

January 1 
Purchases A/c 
Dr. 
60,000 

To Amarâ€™s A/c 
60,000 

(Purchased goods from Amar) 

January 1 
Amarâ€™s A/c 
Dr. 
60,000 

To Bills Payable I A/c 
Dr. 
25,000 

To Bills Payable II A/c 
35,000 

(Bills accepted) 

March 4 
Bills Payable I A/c 
Dr. 
25,000 

To Cash A/c 
25,000 

(Made payment for bill I) 

April 4 
Bills Payable II A/c 
Dr. 
35,000 

Noting Charges A/c 
Dr. 
200 

To Amarâ€™s A/c 
35,200 

(Dishonoured Bill Payable II) 

April 4 
Interest A/c 
Dr. 
300 

To Amarâ€™s A/c 
300 

(Due interest) 

April 4 
Amarâ€™s A/c 
Dr. 
35,500 

To Bills Payable A/c 
35,500 

(Accepted new bill) 

June 7 
Bills Payable A/c 
Dr. 
35,500 

To Cash A/c 
35,500 

(Bill honoured) 
Journal books of Anthony 

Date 
Particulars 
L.F. 
Debit â‚¹ 
Credit â‚¹ 

2017 

January 15 
Bills Receivable A/c 
Dr. 
35,000 

To Amarâ€™s A/c 
35,000 

(Bill received from Amar) 

April 4 
Amarâ€™s A/c 
Dr. 
35,200 

To Bills Receivable A/c 
35,000 

To Cash A/c 
200 

(Dishonoured Bill) 
Question 42
Manohar drew a bill of exchange on Pushkar, his debtor, for â‚¹ 20,000 on 1st March 2016 for 3 months. Pushkar accepted the same and returned it to the drawer. Manohar endorsed the bill to Yadu on 1st April 2016 for a debt of equal amount. Yadu discounted it with the bank at 15% p.a. on 1st May 2016. On the due date the bill was dishonoured. (Noting charges amounted to â‚¹ 100).
Show the journal entries in the books of :
(a) Drawer, (b) Drawee/Acceptor, and (c) Endorsee
Solution:
Journal Books of Manohar 

Date 
Particulars 
L.F. 
Debit â‚¹ 
Credit â‚¹ 

2016 

March 1 
Bills Receivable A/c 
Dr. 
20,000 

To Pushkar 
20,000 

(Bill accepted by Pushkar) 

April 1 
Yadu 
Dr. 
20,000 

To Bills Receivable A/c 
20,000 

(Endorsed bills in favour of Yadu) 

June 4 
Pushkar 
Dr. 
20,100 

To Yadu 
20,100 

(On the due date, bill dishonoured and Yadu paid noting charges) 
Books of Pushkar Journal 

Date 
Particulars 
L.F. 
Debit â‚¹ 
Credit â‚¹ 

2016 

March 1 
Manohar 
Dr. 
20,000 

To Bills Payable A/c 
20,000 

(Bill drawn by Manohar, accepted) 

June 04 
Bills Payable A/c 
Dr. 
20,000 

Noting Charges A/c 
Dr. 
100 

To Manohar 
20,100 

(On the due date, bill dishonoured and paid noting charges) 
Journal Books of Yadu 

Date 
Particulars 
L.F. 
Debit â‚¹ 
Credit â‚¹ 

2016 

April 1 
Bills Receivable A/c 
Dr. 
20,000 

To Manohar 
20,000 

(Bills receivable, received from Manohar) 

May 1 
Bank A/c 
Dr. 
19,750 

Discounting Charges A/c 
Dr. 
250 

To Bills Receivable A/c 
20,000 

(Bill discounted for 1 month @ 15% p.a.) 

June 4 
Manohar 
Dr. 
20,100 

To Bank A/c 
20,100 

(On the due date, bill dishonoured and paid noting charges) 
Working Note: Evaluating discounting charges
Discounting charges = â‚¹20,000 X \(\frac{15}{100}\) X \(\frac{1}{12}\) = â‚¹ 250
Question 43
On 1st January 2017, Hari drew on Gopal, who is his debtor for â‚¹ 60,000 three bills of exchange: First for â‚¹ 15,000 at one month, Second for â‚¹ 20,000 at two months and third for â‚¹ 25,000 at three months. Gopal accepted all three bills.
On 5th January 2017, Hari endorsed the first bill to his creditor Satish in full settlement of his account of â‚¹ 15,200. This bill was duly met on maturity.
On 1st February 2017, the second bill was discounted from the bank @ 12% p.a. This bill was dishonoured on the due date and bank paid â‚¹ 120 as noting charges. On Gopal’s request, Hari drew a fourth bill on Gopal for 2 months for the amount due plus interest @ 15% p.a.
Third bill was paid under a rebate of 12% p.a. one month before maturity. The fourth bill was sent to the bank for collection on 4th May 2017 and was duly met on maturity.
Pass Journal entries in the books of Hari, Gopal and Satish.
Solution:
Books of Hari Journal 

Date 
Particulars 
L.F. 
Debit â‚¹ 
Credit â‚¹ 

2017 

January 1 
Bills Receivable A/c (1) 
Dr. 
15,000 

Bills Receivable A/c (2) 
Dr. 
20,000 

Bills Receivable A/c (3) 
Dr. 
25,000 

To Gopal 
60,000 

(Bill accepted by Gopal) 

January 5 
Satish 
Dr. 
15,200 

To Bills Receivable A/c (1) 
15,000 

To Discount Received A/c 
200 

(Bill endorsed in favour of Satish) 

February 1 
Bank A/c 
Dr. 
19,800 

Discounting Charges A/c 
Dr. 
200 

To Bills Receivable A/c (2) 
20,000 

(Bill discounted for 1 month with the bank @ 12% p.a.) 

March 4 
Gopal 
Dr. 
20,120 

To Bank A/c 
20,120 

(On the due date, bill dishonoured and bank paid noting charges) 

March 4 
Gopal 
Dr. 
503 

To Interest A/c 
503 

(Due interest to be received) 

March 4 
Bills Receivable A/c (4) 
Dr. 
20,623 

To Gopal 
20,623 

(New bill accepted by gopal) 

March 4 
Cash A/c 
Dr. 
24,750 

Rebate A/c 
Dr. 
250 

To Bills Receivable A/c (3) 
25,000 

(Bill retired for 1 month @ 12% p.a. rebate) 

May 4 
Bill Sent for Collection A/c 
Dr. 
20,623 

To Bills Receivable A/c (4) 
20,623 

(Bill sent to the bank for collection) 

May 7 
Bank A/c 
Dr. 
20,623 

To Bills for Collection A/c 
20,623 

(On the due date, bill honoured) 
Journal Books of Gopal 

Date 
Particulars 
L.F. 
Debit â‚¹ 
Credit â‚¹ 

2017 

January 1 
Hari 
Dr. 
60,000 

To Bills Payable A/c (1) 
15,000 

To Bills Payable A/c (2) 
20,000 

To Bills Payable A/c (3) 
25,000 

(Bills drawn by Hari, accepted) 

February 4 
Bills Payable A/c (1) 
Dr. 
15,000 

To Cash A/c 
15,000 

(On the due date, bill honoured) 

March 4 
Bills Payable A/c 
Dr. 
20,000 

Noting Charges A/c 
Dr. 
120 

To Hari 
20,120 

(On the due date, bill honoured and paid noting charges) 

Mar. 04 
Interest A/c 
Dr. 
503 

To Hari 
503 

(Due interest to be paid) 

Mar. 04 
Hari 
Dr. 
20,623 

To Bills Payable A/c (4) 
20,623 

(Bill drawn by Hari, accepted) 

Mar. 04 
Bills Payable A/c (3) 
Dr. 
25,000 

To Cash A/c 
24,750 

To Rebate A/c 
250 

(Bill retired @ 12% rebate for 1 month) 

May 07 
Bills Payable A/c (4) 
Dr. 
20,623 

To Cash A/c 
20,623 

(On the due date, bill honoured) 
Journal Books of Satish 

Date 
Particulars 
L.F. 
Debit â‚¹ 
Credit â‚¹ 

2017 

January 5 
Bills Receivable A/c 
Dr. 
15,000 

Discount Allowed A/c 
Dr. 
200 

To Hari 
15,200 

(Bills receivable, received from Hari) 

February 4 
Cash A/c 
Dr. 
15,000 

To Bills Receivable A/c 
15,000 

(On the due date, bill honoured) 
Working Note1: Evaluating discounting charges
Discounting charges = â‚¹20,000 X \(\frac{12}{100}\) X \(\frac{1}{12}\) = â‚¹ 100
Working Note 2: Evaluating amount of rebate
Amount of rebate = â‚¹25,000 X \(\frac{12}{100}\) X \(\frac{1}{12}\) = â‚¹ 250
Working Note 3: Evaluating amount of interest
Amount of interest = â‚¹20,120 X \(\frac{15}{100}\) X \(\frac{2}{12}\) = â‚¹ 503
Question 44
Harpal sold goods to Sompal for â‚¹ 12,000. Sompal accepted three bills of exchange, the first for â‚¹ 5,000 at one month, the second for â‚¹ 4,000 at two months and the third for â‚¹ 3,000 at three months. Harpal endorsed the first bill to Rajpal. The first bill was dishonoured. Rajpal paid â‚¹ 30 as noting charges. Harpal charged â‚¹ 200 for interest and drew on Sompal a fourth bill for â‚¹ 5,230. The second bill was also dishonoured, noting charges paid being â‚¹ 25. Harpal charged â‚¹ 150 as interest and accepted â‚¹ 2,175 in cash and drew a fifth bill for â‚¹ 2,000. The bill was paid on due date. The third and fourth bills were also met.
Pass Journal entries in the books of Harpal and prepare Sompal’s Account in Harpal’s Ledger.
Solution:
Journal Books of Harpal 

Date 
Particulars 
L.F. 
Debit â‚¹ 
Credit â‚¹ 

Sompal 
Dr. 
12,000 

To Sales A/c 
12,000 

(Sold goods to Sompal) 

Bills Receivable A/c (1) 
Dr. 
5,000 

Bills Receivable A/c (2) 
Dr. 
4,000 

Bills Receivable A/c (3) 
Dr. 
3,000 

To Sompal 
12,000 

(Bill accepted by Sompal) 

Rajpal 
Dr. 
5,000 

To Bills Receivable A/c (1) 
5,000 

(Bill endorsed in favour of Rajpal) 

Sompal 
Dr. 
5,030 

To Rajpal 
5,030 

(On the due date, bill dishonoured and Rajpal paid noting charges) 

Sompal 
Dr. 
200 

To Interest A/c 
200 

(Due interest to be received) 

Bills Receivable A/c (4) 
Dr. 
5,230 

To Sompal 
5,230 

(New bill accepted by Sompal) 

Sompal 
Dr. 
4,025 

To Bills Receivable A/c (2) 
4,000 

To Cash A/c 
25 

(On the due date, bill dishonoured and paid noting charges) 

Sompal 
Dr. 
150 

To Interest A/c 
150 

(Due interest to be received) 

Cash A/c 
Dr. 
2,175 

Bills Receivable A/c (5) 
Dr. 
2,000 

To Sompal 
4,175 

(Received â‚¹ 2,175 in cash and â‚¹ 2,000 new bill accepted by Sompal) 

Cash A/c 
Dr. 
3,000 

To Bills Receivable A/c (3) 
3,000 

(On the due date, bill honoured) 

Cash A/c 
Dr. 
5,230 

To Bills Receivable A/c (4) 
5,230 

(On the due date, bill honoured) 

Cash A/c 
Dr. 
2,000 

To Bills Receivable A/c (5) 
2,000 

(On the due date, bill honoured) 
Sompalâ€™s Account 

Dr. 

Cr. 

Date 
Particulars 
J.F. 
Amount â‚¹ 
Date 
Particulars 
J.F. 
Amount â‚¹ 

Sales A/c 
12,000 
Bills Receivable A/c (1) 
5,000 

Rajpal 
5,030 
Bills Receivable A/c (2) 
4,000 

Interest A/c 
200 
Bills Receivable A/c (3) 
3,000 

Bills Receivable A/c (2) 
4,000 
Bills Receivable A/c (4) 
5,230 

Cash A/c 
25 
Cash A/c 
2,175 

Interest A/c 
150 
Bills Receivable A/c (5) 
2,000 

21,405 
21,405 
Also Check:Â DK Goel Solution for Chapter 19 Rectification of Errors
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Important Topics in Accountancy: 