Question

A drew a bill of ₹ 1,000 on B for 3 months which was duly accepted by the latter. A endorsed the bill to C in full payment of his own acceptance to C for a like amount. C endorsed the bill to B.
Pass the Journal entries in the books of A, B and C.

Answer 1

Books of A
Journal
Date	Particulars		L.F.	Debit Amount Rs	Credit Amount Rs
	Bills Receivable A/c	Dr.		1,000
	To B				1,000
	(B’s acceptance was received)
	C	Dr.		1,000
	To Bills Receivable A/c				1,000
	(B’s acceptance endorsed in favour of C)

Books of B
Journal
Date	Particulars		L.F.	Debit Amount Rs	Credit Amount Rs
	A	Dr.		1,000
	To Bills Payable A/c				1,000
	(Bill drawn by A was accepted)
	Bills Payable A/c	Dr.		1,000
	To Bills Receivable A/c				1,000
	(Amount owed from C was settled by Bill Payable)

Books of C
Journal
Date	Particulars		L.F.	Debit Amount Rs	Credit Amount Rs
	Bills Receivable A/c	Dr.		1,000
	To A				1,000
	(Bills Receivable was received from A)
	B	Dr.		1,000
	To Bills Receivable A/c				1,000
	(Amount owed to B was settled by Bills Receivable)