Question

Anita purchased goods for ₹ 23,000 from Kavita on October 15, 2009 and accepted a bill of exchange drawn upon her by Kavita payable after two months. On the date of maturity the bill was duly presented for payment. Anita dishonoured the bill. The payee noted with ₹ 95 as noting charges.
Record the necessary journal entries in the books of Kavita and Anita, when (a) The bill was immediately discounted by Kavita with her Bank @ 9% p.a. (b) The bill was endorsed by Kavita in favour of her creditor Shankar after one month.

Answer 1

Books of Kavita Journal
Date	Particulars		L.F.	Debit Amount (Rs)	Credit Amount (Rs)
2009
Oct. 15	Anita	Dr.		23,000
	To Sales A/c				23,000
	(Goods sold to Anita)
Oct. 15	Bills Receivable A/c	Dr.		23,000
	To Anita				23,000
	(Anita accepted the bill)
	Case-(a): Bill discounted with the bank
Oct. 15	Bank A/c	Dr.		22,655
	Discounting Charges A/c	Dr.		345
	To Bills Receivable A/c				23,000
	(Bills discounted with the bank @ 9% p.a. for 2 months)
Dec. 18	Anita	Dr.		23,095
	To Bank A/c				23,095
	(Bill dishonoured on due date and noting charges paid by bank)
	Case-(b): Bill endorsed in favour of Shankar
Oct. 15	Shankar	Dr.		23,000
	To Bills Receivable A/c				23,000
	(Bill endorsed in favour of Shankar)
Dec. 18	Anita	Dr.		23,095
	To Shankar				23,095
	(Bill dishonoured on due date and noting charges are receivable by Shankar and payable by Anita)

Books of Anita Journal
Date	Particulars		L.F.	Debit Amount (Rs)	Credit Amount (Rs)
2009
Oct. 15	Purchases A/c	Dr.		23,000
	To Kavita				23,000
	(Goods purchased from Kavita)
Oct. 15	Kavita	Dr.		23,000
	To Bills Payable A/c				23,000
	(Bill drawn by Kavita, accepted)
	Same entry will be passed in both the cases
Dec. 18	Bills Payable A/c	Dr.		23,000
	Noting Charges A/c	Dr.		95
	To Kavita				23,095
	(Bill dishonoured on due date and noting charges paid)

Working Note:

Calculation of Discounting Charges

$\mathrm{Discounting}\mathrm{Charges}=23,000\times \frac{9}{100}\times \frac{2}{12}=\mathrm{Rs}345$