Question

On 1st January 2017, Hari drew on Gopal, who is his debtor for ₹ 60,000 three bills of exchange: First for ₹ 15,000 at one month, Second for ₹ 20,000 at two months and third for ₹ 25,000 at three months. Gopal accepted all the three bills.

On 5th January 2017, Hari endorsed the first bill to his creditor Satish in full settlement of his account of ₹ 15,200. This bill was duly met on maturity.

On 1st February 2017, the second bill was discounted from the bank @ 12% p.a. This bill was dishonoured on the due date and bank paid ₹ 120 as noting charges. On Gopal's request, Hari drew a fourth bill on Gopal for 2 months for the amount due plus interest @ 15% p.a.

Third bill was paid under a rebate of 12% p.a. one month before maturity. The fourth bill was sent to bank for collection on 4th May 2017 and was duly met on maturity.
Pass Journal entries in the books of Hari, Gopal and Satish.

Answer 1

Books of Hari Journal
Date	Particulars		L.F.	Debit Amount (Rs)	Credit Amount (Rs)
2017
Jan. 01	Bills Receivable A/c (1)	Dr.		15,000
	Bills Receivable A/c (2)	Dr.		20,000
	Bills Receivable A/c (3)	Dr.		25,000
	To Gopal				60,000
	(Gopal accepted all the bills)
Jan. 05	Satish	Dr.		15,200
	To Bills Receivable A/c (1)				15,000
	To Discount Received A/c				200
	(Bill endorsed in favour of Satish)
Feb. 01	Bank A/c	Dr.		19,800
	Discounting Charges A/c	Dr.		200
	To Bills Receivable A/c (2)				20,000
	(Bill discounted with the bank @ 12% p.a. for 1 month)
Mar. 04	Gopal	Dr.		20,120
	To Bank A/c				20,120
	(Bill dishonoured on due date and noting charges paid by bank)
Mar. 04	Gopal	Dr.		503
	To Interest A/c				503
	(Interest due to be received)
Mar. 04	Bills Receivable A/c (4)	Dr.		20,623
	To Gopal				20,623
	(Gopal accepted the new bill)
Mar. 04	Cash A/c	Dr.		24,750
	Rebate A/c	Dr.		250
	To Bills Receivable A/c (3)				25,000
	(Bill retired under the rebate of 12% p.a. for 1 month)
May 04	Bill Sent for Collection A/c	Dr.		20,623
	To Bills Receivable A/c (4)				20,623
	(Bill sent to bank for collection)
May 07	Bank A/c	Dr.		20,623
	To Bills for Collection A/c				20,623
	(Bill honoured on due date)

Books of Gopal Journal
Date	Particulars		L.F.	Debit Amount (Rs)	Credit Amount (Rs)
2017
Jan. 01	Hari	Dr.		60,000
	To Bills Payable A/c (1)				15,000
	To Bills Payable A/c (2)				20,000
	To Bills Payable A/c (3)				25,000
	(Bills drawn by Hari, accepted)
Feb. 04	Bills Payable A/c (1)	Dr.		15,000
	To Cash A/c				15,000
	(Bill honoured on due date)
Mar. 04	Bills Payable A/c	Dr.		20,000
	Noting Charges A/c	Dr.		120
	To Hari				20,120
	(Bill dishonoured on due date and noting charges paid)
Mar. 04	Interest A/c	Dr.		503
	To Hari				503
	(Interest due to be paid)
Mar. 04	Hari	Dr.		20,623
	To Bills Payable A/c (4)				20,623
	(Bill drawn by Hari, accepted)
Mar. 04	Bills Payable A/c (3)	Dr.		25,000
	To Cash A/c				24,750
	To Rebate A/c				250
	(Bill retired under the rebate of 12% for 1 month)
May 07	Bills Payable A/c (4)	Dr.		20,623
	To Cash A/c				20,623
	(Bill honoured on due date)

Books of Satish Journal
Date	Particulars		L.F.	Debit Amount (Rs)	Credit Amount (Rs)
2017
Jan. 05	Bills Receivable A/c	Dr.		15,000
	Discount Allowed A/c	Dr.		200
	To Hari				15,200
	(Bills receivable, received from Hari)
Feb. 04	Cash A/c	Dr.		15,000
	To Bills Receivable A/c				15,000
	(Bill honoured on due date)

Working Note:

WN1 Calculation of Discounting Charges

$\mathrm{Discounting}\mathrm{Charges}=20,000\times \frac{12}{100}\times \frac{1}{12}=\mathrm{Rs}200$

WN2 Calculation of amount of Rebate

$\mathrm{Amount}\mathrm{of}\mathrm{Rebate}=25,000\times \frac{12}{100}\times \frac{1}{12}=\mathrm{Rs}250$

WN3 Calculation of amount of Interest

$\mathrm{Amount}\mathrm{of}\mathrm{Interest}=20,120\times \frac{15}{100}\times \frac{2}{12}=\mathrm{Rs}503$