Question

Basu accepted a bill drawn by Nandu amounted to Rs.4,000 and payable after four months. Nandu discounted it with banker @ 18% per annum. On the due date,bill was dishonored. Bank paid Rs.40 as noting charges.After on month Basu paid the amount due to Nandu. Pass Journal entries in the books of Nandu only.

Answer 1

Basu's Journal

$\begin{array}{cccccccc}& \text{Bills Receivable A/c}& \text{Dr.}& & 4,000& & & \\ & \text{To Basu}& & & & 4,000& & \\ & \text{(Being acceptance received)}& & & & & & \\ & \text{Bank A/c}\text{Dr.}& & & 3,760& & & \\ & \text{Discount A/c}\text{Dr.}& & & 240& & & \\ & \text{To Bills Receivable A/c}\text{Dr.}& & & & 4,000& & \\ & \text{(Being bill discounted)}& & & & & & \\ & \text{Basu}\text{Dr.}& & & 4,040& & & \\ & \text{To Bank}& & & & 4,040& & \\ & \text{(Being bill dishonoured and nothing charges paid by bank)}& & & & & & \\ \text{After 1 month}& \text{Cash A/c}\text{Dr.}& & & 4,040& & & \\ & \text{To Basu}& & & & 4,040& & \\ & \text{(Being amount of bill received)}& & & & & & \end{array}$