Question

Arun sold goods to Bala for Rs. 16,000 and drew a bill on Bala for three months who duly accepted the same. Arun endorsed the bill to Charan. Charan endorsed it to his creditor Dharam. Dharam discounted the bill at 15% per annum. On the date of maturity, the bill was dishonoured and bank paid noting charges amounting Rs. 100.

Show the necessary journal entries in the books of Dharam.

Answer 1

In the Books of Dharam
JOURNAL

$\begin{array}{ccccc}\text{Date}& \text{Particulars}& \text{L.F.}& \text{Amt (Dr.)}& \text{Amt (Cr.)}\\ & \text{Bala's A/c}\text{Dr.}& & \text{16,000}& \\ & \text{To Sales A/c}& & & \text{16,000}\\ & \underset{–}{\text{(Goods sold to Bala)}}& & & \\ & \text{Bills Receivable A/c}\text{Dr.}& & \text{16,000}& \\ & \text{To Bala's A/c}& & & \text{16,000}\\ & \underset{–}{\text{(Acceptance received)}}& & & \\ & \text{Charan's A/c}\text{Dr.}& & \text{16,000}& \\ & \text{To Bills Receivable A/c}& & & \text{16,000}\\ & \underset{–}{\text{(Bill endorsed to Charan)}}& & & \\ & \text{Bala's A/c (16,000 + 100)}\text{Dr.}& & \text{16,100}& \\ & \text{To Charan's A/c}& & & \text{16,100}\\ & \text{(Bill dishonoured and noting}& & & \\ & \text{charges receivable from Bala}& & & \\ & \text{and payable to Charan)}& & & \end{array}$