Question

Abdulla sold goods to Tahir on January 17, 2011 for Rs. 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 Rs. 40 as nothing charges. Five days after the dishonour of his acceptance, Tahir settled his debt by making a payment of Rs. 18,700 including interest and noting chares.
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

In The Books of abdulla Journal Entries
$$\begin{array}{ccccc}\text{Date}& \text{Particular}& \text{LF}& \text{Amt.(Dr)}& \text{Amt (Dr)}\\ 2011& & & & \\ \text{Jan 17}& \text{Tahir}\text{Dr}& & 18,000& \\ & \text{To Sales A/c}& & & 18,000\\ & \text{(Being Goods sold to Tahir)}& & & \\ & \underset{–}{}& & & \\ \text{Jan 17}& \text{Bills Receivable A/c}\text{Dr}& & 18,000& \\ & \text{To Tahir}& & & 18,000\\ & \text{(Being acceptance received)}& & & \\ & \underset{–}{}& & & \\ \text{Mar 4}& \text{Tahir}\text{Dr}& & 18,040& \\ & \text{To Bills Receivable A/c}& & & 18,000\\ & \text{To Cash A/c}& & & 40\\ & \text{(Being Bill dishonoured noting charge due to tahir)}& & & \\ & \underset{–}{}& & & \\ \text{Mar 7}& \text{Tahir}\text{Dr}& & 660& \\ & \text{To Interest A/c}& & & 660\\ & \text{(Being interest due to Tahir)}& & & \\ & \underset{–}{}& & & \\ \text{Mar 12}& \text{Cash a/c}\text{Dr}& & 18,700& \\ & \text{To Tahir}& & & 18,700\\ & \text{(Being Payment received from Tahir with interest)}& & & \end{array}$$
Dr Tahir's Account Cr
$$\begin{array}{cccccccc}\text{Date}& \text{Particular}& \text{JF}& \text{Amt. (Rs.)}& \text{Date}& \text{Particulars}& \text{Jf}& \text{Amt. (Rs.)}\\ 2011& & & & 2011& & & \\ \text{Jan 17}& \text{To Sales A/c}& & 18,000& \text{Jan 17}& \text{By Bills}& & \\ & & & & & \text{Receviable A/c}& & 18,000\\ \text{Mar 7}& \text{To Bills}& & & \text{Mar 12}& \text{By Cash}& & 18,700\\ & \text{Receivable A/c}& & 18,000& & & & \\ \text{Mar 7}& \text{To Cash A/c}& & 40& & & & \\ \text{Mar 7}& \text{To Interest A/c}& & 660& & & & \\ & & & \underset{–}{}& & & & \underset{–}{}\\ & & & 36,700& & & & 36,700\\ & & & \underset{–}{}& & & & \underset{–}{}\end{array}$$
In The Books of Tahir Journal Entries
$$\begin{array}{ccccc}\text{Date}& \text{Particular}& \text{LF}& \text{Amt.(Dr)}& \text{Amt (Dr)}\\ 2011& & & & \\ \text{Jan 17}& \text{Purchase A/c}\text{Dr}& & 18,000& \\ & \text{To Abdulla}& & & 18,000\\ & \text{(Being Goods Purchased from Abdulla)}& & & \\ & \underset{–}{}& & & \\ \text{Jan 17}& \text{Abdulla}\text{Dr}& & 18,000& \\ & \text{To Bills Payable A/c}& & & 18,000\\ & \text{(Being acceptance given)}& & & \\ & \underset{–}{}& & & \\ \text{Mar 7}& \text{Bills payable A/c}\text{Dr}& & 18,000& \\ & \text{Noting Charges A/c}\text{Dr}& & 40& \\ & \text{To Bills Receivable A/c}& & & 18,040\\ & \text{To Abdulla}& & & 18,040\\ & \text{(Being Bill dishonoured noting charge paid)}& & & \\ & \underset{–}{}& & & \\ \text{Mar 7}& \text{Interest A/c}\text{Dr}& & 18,700& \\ & \text{To Abdulla}& & & 18,700\\ & \text{(Being interest due to Abdulla)}& & & \\ & \underset{–}{}& & & \\ \text{Mar 12}& \text{Abdulla}\text{Dr}& & 18,700& \\ & \text{To Cash A/c}& & & 18,700\\ & \text{(Being Payment paid To Abdulla with interest)}& & & \end{array}$$
Dr Abdulla's Account Cr
$$\begin{array}{cccccccc}\text{Date}& \text{Particular}& \text{JF}& \text{Amt. (Rs.)}& \text{Date}& \text{Particulars}& \text{Jf}& \text{Amt. (Rs.)}\\ 2011& & & & 2011& & & \\ \text{Jan 17}& \text{To Bills Payable}& & & \text{Jan 17}& \text{By Purchase A/c}& & 18,000\\ & \text{A/c}& & 18,000& & & & \\ & & & & \text{Mar 4}& \text{By Bills Payable}& & \\ \text{Mar 17}& \text{To Cash A/c}& & 18,700& & \text{A/c}& & 18,000\\ & & & & \text{Mar 4}& \text{By Noting}& & \\ & & & & & \text{Charges A/c}& & 40\\ & & & & \text{Mar 9}& \text{By Interest A/c}& & 660\\ & & & \underset{–}{}& & & & \underset{–}{}\\ & & & 36,700& & & & 36,700\\ & & & \underset{–}{}& & & & \underset{–}{}\end{array}$$