Question

Abdulla sold goods to Tahir on Jan. 17, 2017 for ₹ 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 ₹ 40 as noting charges. Five days after the dishonour of his acceptance Tahir settled his debt by making a payment of ₹ 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.

Answer 1

Books of Abdulla Journal
Date	Particulars		L.F.	Debit Amount (Rs)	Credit Amount (Rs)
2017
Jan. 17	Tahir	Dr.		18,000
	To Sales A/c				18,000
	(Goods sold to Tahir)
Jan. 17	Bills Receivable A/c	Dr.		18,000
	To Tahir				18,000
	(Tahir accepted the bill)
Mar. 06	Tahir	Dr.		18,040
	To Bills Receivable A/c				18,000
	To Cash A/c				40
	(Bill dishonoured on due date and noting charges paid)
Mar. 11	Tahir (18,700 – 18,040)	Dr.		660
	To Interest A/c				660
	(Interest due to be received)
Mar. 11	Cash A/c	Dr.		18,700
	To Tahir				18,700
	(Cash received from Tahir)

Tahir’s Account
Dr.									Cr.
Date		Particulars	J.F.	Amount (Rs)	Date	Particulars	J.F.	Amount (Rs)
2017					2017
Jan. 17		Sales A/c		18,000	Jan. 17	Bills Receivable A/c		18,000
Mar. 06		Bills Receivable A/c		18,000	Mar. 11	Cash A/c		18,700
Mar. 06		Cash A/c		40
Mar. 11		Interest A/c		660
				36,700				36,700

Books of Tahir Journal
Date	Particulars		L.F.	Debit Amount (Rs)	Credit Amount (Rs)
2017
Jan. 01	Purchases A/c	Dr.		18,000
	To Abdulla				18,000
	(Goods purchased from Abdulla)
Jan. 01	Abdulla	Dr.		18,000
	To Bills Payable A/c				18,000
	(Bill drawn by Abdulla, accepted)
Mar. 06	Bills Payable A/c	Dr.		18,000
	Noting Charges A/c	Dr.		40
	To Abdulla				18,040
	(Bill dishonoured on due date and noting charges paid)
Mar. 11	Interest A/c (18,700 – 18,040)	Dr.		660
	To Abdulla				660
	(Interest due to be paid)
Mar. 11	Abdulla	Dr.		18,700
	To Cash A/c				18,700
	(Cash paid to Abdulla)

Abdulla’s Account
Dr.									Cr.
Date		Particulars	J.F.	Amount (Rs)	Date	Particulars	J.F.	Amount (Rs)
2017					2017
Jan. 17		Bills Payable A/c		18,000	Jan. 17	Purchases A/c		18,000
Mar. 11		Cash A/c		18,700	Mar. 06	Bills Payable A/c		18,000
					Mar. 06	Noting Charges A/c		40
					Mar. 11	Interest A/c		660
				36,700				36,700