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Question

On 1st January, 2016, Shieba sold goods to Vishal for Rs. 10,000 and drew upon him bills of exchange of 2 months. Vishal accepted the bill and returned it to Shieba. On the date of maturity the bills was dishonoured by Vishal. Record the necessary entries in all the cases listed below in the books of Shieba and Vishal.

(i) When the bill is kept by Shieba till its maturity.

(ii) When the bill is discounted by Shieba for Rs. 200.

Noting charges were Rs. 100.

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Solution

In the Books of Shieba
JOURNAL
Date ParticularsL.F.Amt. (Dr.)Amt. (Cr.)Entry in All the Cases––––––––––––––––––––––2016Jan 1Vishal's A/c Dr.10,000 To Sales A/c10,000(Goods sold to Vishal) ––––––––––––––––––––––––––––––––––––––––––––––––––––––––––Jan 1Bills Receivable A/c Dr.10,000 To Vishal's A/c10,000(Vishal's acceptance received) ––––––––––––––––––––––––––––––––––––––––––––––––––––––––––Additional Entry in Case (i)Mar 4Vishal's A/c Dr.10,100 To Bills Receivable A/c10,000 To Cash A/c 100(Vishal dishonoured his acceptance) ––––––––––––––––––––––––––––––––––––––––––––––––––––––––––Additional Entry in Case (ii)Jan 1Bank A/c Dr.9,800Discount A/c Dr. 200 To Bills Receivable A/c10,000(Bill receivable discounted with bank) ––––––––––––––––––––––––––––––––––––––––––––––––––––––––––Mar 4Vishal Dr.10,100 To Bank A/c10,100(Discounted bill dishonoured by Vishal)

In the Books of Vishal
JOURNAL
Date ParticularsL.F.Amt. (Dr.)Amt. (Cr.)2016Jan 1Purchanses A/c Dr.10,000 To Shieba's A/c10,000(Purchased goods from Shieba) –––––––––––––––––––––––––––––––––––––––––––––––Jan 1Shieba's A/c Dr.10,000 To Bills Payable A/c10,000(Accepted Shieba's draft) –––––––––––––––––––––––––––––––––––––––––––––––Mar 4Bills Payable A/c Dr.10,000Noting charges A/c Dr. 100 To Shieba's A/c10,100(Acceptance in favour of Shieba dishonoured)


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