Question

How will you record the following transactions in the books Kapadia?
(a) A bill received from Dalpat for ₹ 1,000 has to be renewed, Dalpat agrees to pay ₹ 20 as interest.
(b) Swamy's bill for ₹ 800 endorsed in favour of Ghosh dishonoured, Ghosh pays ₹ 10 as noting charges. Swamy pays ₹ 300 immediately and agrees to accept a new bill for 3 months for the balance together with interest at 6% p.a. Ghosh's Account is settled by cheque.

Answer 1

(a)

Books of Kapadia
Journal
Date	Particulars		L.F.	Debit Amount Rs	Credit Amount Rs
	Dalpat	Dr.		1,000
	To Bills Receivable A/c				1,000
	(Dalpat acceptance cancelled)
	Dalpat	Dr.		20
	To Interest A/c				20
	(Interest due from Dalpat)
	Cash A/c	Dr.		20
	To Dalpat				20
	(Cash received from Dalpat for interest on renewal of the bill)
	Bills Receivable A/c	Dr.		1,000
	To Dalpat				1,000
	(New bill accepted by Dalpat)

(b)

Books of Kapadia
Journal
Date	Particulars		L.F.	Debit Amount Rs	Credit Amount Rs
	Swamy	Dr.		810
	To Ghosh				810
	(Swamy’s acceptance dishonoured and Ghosh paid Rs 10 as Noting Charges)
	Cash A/c	Dr.		300
	To Swamy				300
	(Cash received from Swamy)
	Swamy	Dr.		7.65
	To Interest A/c				7.65
	(Interest due from Swamy)
	Working Note: Interest = 510 × 6% × 3/12 = Rs 7.65
	Bills Receivable A/c	Dr.		517.65
	To Swamy				517.65
	(Swamy’s acceptance received for the balance due including interest)
	Ghosh	Dr.		810
	To Bank A/c				810
	(Amount due to Ghosh was paid through cheque)