Question

A sold goods to B for Rs.4,000 and drew a bill for the amount due. B after giving his acceptance returned the bill to A. A discounted it form his bank for Rs.3,900. On due date, bill returned dishonoured and bank paid Rs.50 as noting charges. After one week B paid the full amount of the bill including the noting charges. Give journal entries in the books of A only.

Answer 1

A's Journal

$\begin{array}{ccc}\text{B's A/c Dr}& 4,000& \\ \text{To Sales A/c}& & 4,000\\ \text{(Being goods sold)}& & \\ \text{Bills Receivable A/c Dr}& 4,000& \\ \text{To B A/c}& & 4,000\\ \text{(Being acceptance received)}& & \\ \text{Bank A/c Dr}& 3,900& \\ \text{Discount A/c Dr}& 100& \\ \text{To Bills Receivable A/c}& & 4,000\\ \text{(Being bill dishonoured and noting charges paid by bank)}& & \\ \text{After 1 month Cash A/c Dr.}& 4,050& \\ \text{To B A/c}& & 4,050\\ \text{(Being amount of bill received)}& & \end{array}$