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.
Table of Content  
Question 25  Question 610 
Question 1115  Question 1620 
Question 2125  Question 2630 
Question 3135  Question 3640 
Question 4144 
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
Stay tuned to BYJUâ€™S for more DK Goel solutions, question papers, sample papers, syllabus and Commerce notifications.
Important Topics in Accountancy: 
This app is so helpful. Thanks byjus app