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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.


Solution

                                                                         In the Books of A
                                                                              JOURNAL
Date                                ParticularsL.F.Amt. (Dr.)Amt. (Cr.)2016Jan 1S's A/c                                                                                                                     Dr.60,000   To Sales A/c60,000(Goods sold to S on credit)                                                                              ––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––Jan 1Bank A/c                                                                                                                Dr.29,400Discount Allowed A/c   (30,000×2%)                                                              Dr.      600   To S's A/c  (60,000×5%)30,000(Being 50% of Rs. 60,000 received from S after allowing a cash discount of 2%)––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––Jan 1Bills Receivable A/c                                                                                             Dr.30,000   To S's A/c30,000(Received a promissory note from S for the balance)                                   ––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––Jan 23Bank A/c                                                                                                               Dr.30,000   To Bills Receivable A/c30,000(Amount received in respect of promissory note due this day)      

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.


Accountancy

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