Question

On 1st January, 2016 A sold goods for Rs. 60,000 to S. $50\%$ of the payment was made immediately by S on which A allowed a cash discount of $2\%$. For the balance, S drew a promissory note in favour of A payable after 20 days. Since, the date of maturity of bill was a public holiday, A presented the bill on a day, as per the provisions of Negotiable Instrument Act which was met by S. State the date on which the bill was presented by A for payment and journalise the above transactions in the books of A.

Answer 1

In the Books of A
JOURNAL
$\begin{array}{ccccc}\text{Date}& \text{Particulars}& L.F.& \text{Amt. (Dr.)}& \text{Amt. (Cr.)}\\ 2016& & & & \\ \text{Jan 1}& \text{S's A/c}\text{Dr.}& & 60,000& \\ & \text{To Sales A/c}& & & 60,000\\ & \underset{–}{\text{(Goods sold to S on credit)}}& & & \\ \text{Jan 1}& \text{Bank A/c}\text{Dr.}& & 29,400& \\ & \text{Discount Allowed A/c}(30,000\times 2\%)\text{Dr.}& & 600& \\ & \text{To S's A/c}(60,000\times 5\%)& & & 30,000\\ & \underset{–}{\text{(Being 50\% of Rs. 60,000 received from S after allowing a cash discount of 2\%)}}& & & \\ \text{Jan 1}& \text{Bills Receivable A/c}\text{Dr.}& & 30,000& \\ & \text{To S's A/c}& & & 30,000\\ & \underset{–}{\text{(Received a promissory note from S for the balance)}}& & & \\ \text{Jan 23}& \text{Bank A/c}\text{Dr.}& & 30,000& \\ & \text{To Bills Receivable A/c}& & & 30,000\\ & \text{(Amount received in respect of promissory note due this day)}& & & \end{array}$

Note: Since the due date of the promissory note i.e, 24th January, falls on a public holiday, due date will be one day earlier i.e., 23rd January.