Question

On 15th February, 2017, X sold goods to Y for ₹ 6,000. On the same day, Y accepted a bill drawn upon him by X for three months for ₹ 6,000. X immediately discounted the bill at 15% p.a. at his bank and Y met the bill on maturity. Make Journal entries in the books of both the parties.

Answer 1

Books of X Journal
Date	Particulars		L.F.	Debit Amount (Rs)	Credit Amount (Rs)
2017
Feb. 15	Y	Dr.		6,000
	To Sales A/c				6,000
	(Goods sold to Y)
Feb. 15	Bills Receivable A/c	Dr.		6,000
	To Y				6,000
	(Y accepted the bill)
Feb. 15	Bank A/c	Dr.		5,775
	Discounting Charges A/c	Dr.		225
	To Bills Receivable A/c				6,000
	(Bill discounted with bank @ 15% p.a. for 3 months)

Books of Y Journal
Date	Particulars		L.F.	Debit Amount (Rs)	Credit Amount (Rs)
2017
Feb. 15	Purchases A/c	Dr.		6,000
	To X				6,000
	(Goods purchased from X)
Feb. 15	X	Dr.		6,000
	To Bills Payable A/c				6,000
	(Bill drawn by X, accepted)
May 18	Bills Payable A/c	Dr.		6,000
	To Cash A/c				6,000
	(Bill honoured on maturity)

Working Note:

Calculation of Discounting Charges

$\mathrm{Discounting}\mathrm{Charges}=6,000\times \frac{15}{100}\times \frac{3}{12}=\mathrm{Rs}225$