Question

# On 1st January, 2010, Arun purchased from Barun goods invoiced at ₹ 10,000. On the same date, Barun drew upon Arun a bill for the amount at 2 months and Arun accepted the same. On 4th January, 2010, Barun got the bill discounted with his bank @12% per annum. On due date, Arun told Barun that he was not in a position to pay the full amount and requested Barun to accept ₹ 5,000 in cash and draw a fresh bill at 2 months for the remaining amount plus interest at 15% per annum, Barun agreed. The second bill was duly met on the due date. Give journal entries to record the above transactions in the books of Barun.

Solution

## Books of Barun Journal Date Particulars L.F. Debit Amount (Rs) Credit Amount (Rs) 2010           Jan. 01 Arun Dr.   10,000       To Sales A/c       10,000   (Goods sold to Arun)                     Jan. 01 Bills Receivable A/c Dr.   10,000       To Arun       10,000   (Arun accepted the bill)                     Jan. 04 Bank A/c Dr.   9,800     Discounting Charges A/c Dr.   200       To Bills Receivable A/c       10,000   (Bill discounted with the bank @ 12% p.a. for 2 months)                     Mar. 04 Arun Dr.   10,000       To Bank A/c       10,000   (Bill cancelled on due date)                     Mar. 04 Cash Dr.   5,000       To Arun       5,000   (Cash received from Arun)                     Mar. 04 Arun Dr.   125       To Interest A/c       125   (Interest due to be received)                     Mar. 04 Bills Receivable A/c Dr.   5,125       To Arun       5,125   (Arun accepted the new bill)                     May 07 Cash A/c Dr.   5,125       To Bills Receivable A/c       5,125   (Bill honoured on due date         Working Note: WN 1Calculation of Discounting Charges WN2 Calculation of amount of Interest AccountancyDK Goel (2019)All

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