Question

A sells goods of ₹ 10,000 on 1st March, 2019 to B on credit. B accepts a bill on the same date for the amount payable three months after date. A discounts the bill at 6% p.a. from bank on 4th April. On maturity, the bill is met by B. Pass the necessary Journal entries in the books of both the parties.

Answer 1

In the books of A
Journal
Date	Particulars		L.F.	Debit Amount (₹)	Credit Amount (₹)
2019
March 01	B’s A/c	Dr.		10,000
	To Sales A/c				10,000
	(Being goods sold to B on credit)
March 01	Bills Receivable A/c	Dr.		10,000
	To B’s A/c				10,000
	(Being bill drawn on B for three months)
April 04	Bank A/c	Dr.		10,000
	Discounting Charges A/c	Dr.		100
	To Bills Receivable A/c				9,900
	(Being bill discounted with bank and charges paid @6% p.a.)

Working Notes:
Discounting Charges = ₹ (10,000 × 6/100 × 2/12) = ₹ 100

In the books of B
Journal
Date	Particulars		L.F.	Debit Amount (₹)	Credit Amount (₹)
2019
March 01	Purchases A/c	Dr.		10,000
	To A’s A/c				10,000
	(Being goods purchased from A on credit)
March 01	A’s A/c	Dr.		10,000
	To Bills Payable A/c				10,000
	(Being acceptance given to A)
June 04	Bills Payable A/c	Dr.		10,000
	To Bank A/c				10,000
	(Being bill paid on maturity)