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Question

A sold goods to B for ₹ 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 ₹ 68,000. On the date of maturity, the bill was dishonoured and Bank paid noting charges amounting to ₹ 200.
Show Journal entries in the books of all the parties to record these transactions.


Solution

Books of A
Journal
Date
Particulars
L.F.
Debit
Amount
(₹)
Credit
Amount
(₹)
 
B Dr.  
70,800
 
 
  To Sales A/c    
 
60,000
    To Output IGST A/c       10,800
 
(Goods sold to B plus 18% Inter-state GST)    
 
 
 
     
 
 
 
Bills Receivable A/c Dr.  
70,800
 
 
  To B    
 
70,800
 
(B accepted the bill)    
 
 
       
 
 
 
C Dr.  
70,800
 
 
  To Bills Receivable A/c    
 
70,800
  (Bill endorsed in favour of C)    
 
 
       
 
 
 
B Dr.  
71,000
 
 
  To C    
 
71,000
 
(Bills dishonoured on due date and noting charges receivable from B and payable to C)    
 
 
 
Books of B
Journal
Date
Particulars
L.F.
Debit
Amount
(₹)
Credit
Amount
(₹)
 
Purchases A/c Dr.  
60,000
 
  Input IGST A/c Dr.   10,800  
 
  To A    
 
70,800
 
(Goods purchased from A)    
 
 
 
     
 
 
 
A 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 A    
 
71,000
 
(Bill dishonoured on due date and noting charges paid)  
 
 
 
Books of C
Journal
Date
Particulars
L.F.
Debit
Amount
(₹)
Credit
Amount
(₹)
 
Bills Receivable A/c Dr.  
70,800
 
 
  To A    
 
70,800
 
(Bills receivable, received from A)    
 
 
 
     
 
 
 
D Dr.  
70,800
 
 
  To Bills Receivable A/c    
 
70,800
 
(Bill endorsed in favour of D)    
 
 
 
     
 
 
 
A Dr.  
71,000
 
 
  To D    
 
71,000
 
(Bill dishonoured on due date and noting charges receivable from A and payable to D)    
 
 
 
Books of D
Journal
Date
Particulars
L.F.
Debit
Amount
(₹)
Credit
Amount
(₹)
 
Bills Receivable A/c Dr.  
70,800
 
 
  To 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)    
 
 
 
     
 
 
 
C Dr.  
71,000
 
 
  To Bank A/c    
 
71,000
 
(Bill dishonoured on due date and noting charges paid by bank)    
 
 

Accountancy
DK Goel (2019)
All

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