Question

On 15th June, 2017, Mohan sold goods to Sohan valued at ₹ 2,000. He drew a bill at 3 months for the amount and discounted the same with his bankers at ₹ 1,960. On the due date the bill was dishonoured and Mohan paid to the bank the amount due plus the noting charges of ₹ 10.
Draft the Journal entries in the books of all parties.

Answer 1

Books of Mohan
Journal
Date	Particulars		L.F.	Debit Amount Rs	Credit Amount Rs
2017
June 15	Sohan	Dr.		2,000
	To Sales A/c				2,000
	(Goods sold to Sohan)
June 15	Bills Receivable A/c	Dr.		2,000
	To Sohan				2,000
	(Sohan’s acceptance was received)
June 15	Bank A/c	Dr.		1,960
	Discount Charges A/c	Dr.		40
	To Bills Receivable A/c				2,000
	(Sohan’s acceptance discounted with bank)
Sep.18	Sohan	Dr.		2,010
	To Bank A/c				2,010
	(Sohan’s acceptance became dishonoured and Bank paid Rs 10 Noting Charges)
Sep.18	Bank A/c	Dr.		2,010
	To Cash A/c				2,010
	(Liabilities on account bill dishonoured was discharged)

Books of Sohan
Journal
Date	Particulars		L.F.	Debit Amount Rs	Credit Amount Rs
2017
June 15	Purchases A/c	Dr.		2,000
	To Mohan				2,000
	(Goods were bought from Sohan)
June 15	Mohan	Dr.		2,000
	To Bills Payable A/c				2,000
	(Bills drawn by Mohan was accepted)
Sep.18	Bills Payable A/c	Dr.		2,000
	Noting Charges A/c	Dr.		10
	To Mohan				2,010
	(Bills Payable became dishonoured)