Question

On 1st February, 2016, Ravi sold goods to Mohan for Rs. 18,000; Rs. 3,000 were paid by Mohan immediately and for the balance he accepted three months bill drawn upon him by Ravi. On the date of maturity of the bill Mohan requested Ravi to cancel the old bill and draw a new bill upon him for a period of 2 months. He further agreed to pay interest in cash to Ravi @ 12 % per annum. Ravi agreed to Mohan's request and cancelled the old bill and drew a new bill. The new bill was met on maturity by Mohan.
Pass necessary journal entries in the books of Ravi.

Answer 1

In the Books of Ravi
JOURNAL

$\begin{array}{ccccc}\text{Date}& \text{Particulars}& \text{L.F.}& \text{Amt (Dr.)}& \text{Amt (Cr.)}\\ \text{2016}& & & & \\ \text{Feb 1}& \text{Mohan's A/c}\text{Dr.}& & \text{18,000}& \\ & \text{To Sales A/c}& & & \text{18,000}\\ & \underset{–}{\text{(Goods sold to Mohan)}}& & & \\ \text{Feb 1}& \text{Cash A/c}\text{Dr.}& & \text{3,000}& \\ & \text{Bills Receivable A/c}\text{Dr.}& & \text{15,000}& \\ & \text{To Mohan's A/c}& & & 18,000\\ & \text{(Rs. 3,000 received in cash from}& & & \\ & \underset{–}{\text{Ravi and an acceptance for the balance)}}& & & \\ \text{May 4}& \text{Mohan's A/c}\text{Dr.}& & \text{15,300}& \\ & \text{To Bills Receivable A/c}& & & \text{15,000}\\ & \text{To Interest A/c}& & & 300\\ & \text{(Old bill cancelled and Rs. 300}& & & \\ & \underset{–}{\text{charged as interest)}}& & & \\ \text{May 4}& \text{Bills Receivable A/c}\text{Dr.}& & \text{15,000}& \\ & \text{Cash A/c}\text{Dr.}& & \text{300}& \\ & \text{To Mohan's A/c}& & & 15,300\\ & \text{(Received new acceptance and}& & & \\ & \underset{–}{\text{interest from Mohan)}}& & & \\ \text{Jul 7}& \text{Bank A/c}\text{Dr.}& & \text{15,000}& \\ & \text{To Bills Receivable A/c}& & & 15,000\\ & \text{(Mohan met his new acceptance)}& & & \end{array}$