Question

Following was the position of debtor and creditor of Gautam as on 1.1.2017.

	Debtors	Creditors
	Rs	Rs
Babu	5,000	–
Chanderkala	8,000	–
Kiran	13,500	–
Anita	14,000	–
Anju	–	5,000
Sheiba	–	12,000
Manju	–	6,000

The following transactions took place in the month of Jan 2017:

Jan. 02	Drew on Babu at two months after date at full settlement for Rs 4,800. Babu accepted the bill and returned it on 5.1.2017.
Jan. 04	Babu’s bill discounted for Rs 4,750.
Jan. 08	Chanderkala sent a promissory note for Rs 8,000 payable three months after date.
Jan. 10	Promissory note received from Chanderkala discounted for Rs 7,900
Jan. 12	Accepted Sheiba draft for the amount due payable two months after date.
Jan. 22	Anita sent his promissory note payable after two months.
Jan. 23	Anita’s promissory note endorsed in favour of Manju.
Jan. 25	Accepted Anju’s draft payable after three months.
Jan. 29	Kiran sent Rs 2,000 in cash and a promissory note for the balance payable after three months. Record the above transactions in the proper subsidiary books.

Answer 1

Bills Receivable Book

No.

Date of Bill 2017

Date Received 2016

From whom of Bill

Drawer whom received

Acceptor

Where

Term Payable

Due date 2016

L.F.

Amount Rs

Cash Book Folio

Remarks

01

Jan.02

Jan.05

Babu

Self

Babu

2 months

Mar.05

4,800

Total

4,800

Bills Payable Book

No.

Date of Bill 2017

To Whom Given

Drawer

Payee

Where payable

Term

Due date 2017

Ledger

Amount Rs

Date paid

Cash Book Folio

Remarks

01

Jan.12

Sheiba

Sheiba

–

2 months

Mar.15

12,000

02

Jan.25

Anju

Anju

–

2 months

Apr.28

5,000

Total

17,000

Cash Book
Dr.									Cr.
Date	Particulars	L.F.	Cash Rs	Bank Rs	Date	Particulars	L.F.	Cash Rs	Bank Rs
2017					2017
Jan.04	Bills Receivable			4,750
Jan.10	Bills Receivable			7,900
Jan.29	Kiran		2,000		Jan.31	Balance c/d		2,000	12,650
			2,000	12,650				2,000	12,650

There is difference between Bills of Exchange and Promissory Note. In case of Promissory Note, parties are makers and payees. However, in Bills of Exchange parties are Drawer, drawee (acceptor) and payee on account difference Promissory Note has not been recorded in Bills Receivable and Bills Payable book.

Books of Gautam Journal
Date		Particulars				L.F.	Debit Amount Rs	Credit Amount Rs
2017
Jan.05	Discount Allowed A/c			Dr.			200
			To Babu					200
	(Babu's acceptance received and allowed him discount Rs 200)
Jan.04	Discount A/c				Dr.		50
		To Bills Receivable A/c						50
	(Babu's acceptance discounted with a discount charge of Rs 50)
Jan.08	Bills Receivable A/c				Dr.		8,000
		To Chanderkala						8,000
	(Promissory Note from Chanderkala received)
Jan.10	Discount A/c			Dr.			100
		To Bills Receivable A/c						100
	(Chanderkala's Promissory Note discounted with bank at discount of Rs 100)
Jan.22	Bills Receivable A/c			Dr.			14,000
		To Anita						14,000
	(Promissory Note received from Anita)
Jan.23	Manju				Dr.		14,000
		To Bills Receivable A/c						14,000
	(Anita's Promissory Note endorsed to Manju)
Jan.29	Bills Receivable A/c				Dr.		11,500
		To Kiran						11,500
	(Promissory Note from Kiran received)