Question

B owes A ₹ 4,000. On 1st January, 2018, B accepts a 3 months bill for ₹ 3,900 being in full settlement of the claim. At its due date the bill is dishounoured. Nothing charges ₹ 50 are paid by A. Give the Journal entries in the books of A and B.

Answer 1

Books of A
Journal
Date	Particulars		L.F.	Debit Amount Rs	Credit Amount Rs
2018
Jan.01	Bills Receivable A/c	Dr.		3,900
	Discount Allowed A/c	Dr.		100
	To B				4,000
	(B’s acceptance received and discount allowed)
April 04	B	Dr.		4,050
	To Bills Receivable A/c				3,900
	To Discount Allowed A/c				100
	To Cash A/c				50
	(B’s acceptance became dishonoured and Noting charges paid Rs 50)

Books of B
Journal
Date	Particulars		L.F.	Debit Amount Rs	Credit Amount Rs
2018
Jan.01	A	Dr.		4,000
	To Bills Payable A/c				3,900
	To Discount Received A/c				100
	(Bill drawn by A was accepted and discount was received from him)
April 04	Bills payable A/c	Dr.		3,900
	Discount Received A/c	Dr.		100
	Noting Charges A/c	Dr.		50
	To A				4,050
	(Bills Payable dishonoured )