Question

Darshan sold goods for ₹ 40,000 to Varun on 8.1.2017 and drew upon him a bill of exchange payable after two months. Varun accepted the bill and returned the same to Darshan. On the due date the bill was met by Varun. Record the necessary Journal entries in the books of Darshan and Varun in the following circumstances:
When the bill was retained by Darshan till the date of its maturity.
When Darshan immediately discounted the bill @6% p.a. with his bank.
When the bill was endorsed immediately by Darshan in favour of his creditor Suresh.
When three days before its maturity, the bill was sent by Darshan to his bank for collection.

Answer 1

Books of Darshan Journal
Date	Particulars		L.F.	Debit Amount (Rs)	Credit Amount (Rs)
2017
Jan. 08	Varun	Dr.		40,000
	To Sales A/c				40,000
	(Goods sold to Varun)
Jan. 08	Bills Receivable A/c	Dr.		40,000
	To Varun				40,000
	(Varun accepted the bill)
	Case-I: Bill retained till maturity
Mar. 11	Cash A/c	Dr.		40,000
	To Bills Receivable A/c				40,000
	(Bill honoured on due date)
	Case-II: Bill discounted with the bank
Jan. 08	Bank A/c	Dr.		39,600
	Discounting Charges A/c	Dr.		400
	To Bills Receivable A/c				40,000
	(Bills discounted with the bank @ 6% p.a. for 2 months)
	Case-III: Bill endorsed in favour of Suresh
Jan. 08	Suresh	Dr.		40,000
	To Bills Receivable A/c				40,000
	(Bill endorsed in favour of Suresh)
	Case-IV: Bill sent to bank for collection
Mar. 11	Bill Sent for Collection A/c	Dr.		40,000
	To Bills Receivable A/c				40,000
	(Bills sent to bank for collection)
Mar. 11	Bank A/c	Dr.		5,125
	To Bill Sent for Collection A/c				5,125
	(Bill honoured on due date)

Books of Varun Journal
Date	Particulars		L.F.	Debit Amount (Rs)	Credit Amount (Rs)
2017
Jan. 08	Purchases A/c	Dr.		40,000
	To Darshan				40,000
	(Goods purchased from Darshan)
Jan. 08	Darshan	Dr.		40,000
	To Bills Payable A/c				40,000
	(Bill drawn by Darshan, accepted)
	Same entry will be passed in all the four cases
Mar. 11	Bills Payable A/c	Dr.		40,000
	To Cash A/c				40,000
	(Bill honoured on due date)

Working Note:

Calculation of Discounting Charges

$\mathrm{Discounting}\mathrm{Charges}=40,000\times \frac{6}{100}\times \frac{2}{12}=\mathrm{Rs}400$