Question

On 1st January, 2018, A sold goods to B for ₹ 5,000 plus IGST @ 18%. A received ₹ 900 by cheque from B and drew on him a bill for the balance amount payable 3 months after date. The bill was duly accepted by B. A retained the bill till due date. On due date, the bill was paid. Pass Journal entries in the books of A and B. Also, show necessary accounts in the books of both the parties.

Answer 1

Books of A
Journal
Date	Particulars		L.F.	Debit Amount Rs	Credit Amount Rs
2018
Jan.01	B	Dr.		5,900
	To Sales A/c To Output IGST A/c				5,000 900
	(Goods sold to B plus IGST @ 18%)
Jan.01	Bills Receivable A/c Bank A/c	Dr. Dr.		5,000 900
	To B				5,000
	(B accepted the bill and paid IGST by cheque)
Apr.04	Cash A/c	Dr.		5,000
	To Bills Receivable A/c				5,000
	(Amount of bill received on its maturity)

Books of B
Journal
Date	Particulars		L.F.	Debit Amount Rs	Credit Amount Rs
2018
Jan.01	Purchases A/c Input IGST A/c	Dr. Dr.		5,000 900
	To A				5,900
	(Goods bought from A plus IGST @ 18%)
Jan.01	A	Dr.		5,900
	To Bills Payable A/c To Bank A/c				5,000 900
	(Bill drawn by A accepted and IGST paid by cheque)
Apr.04	Bills Payable A/c	Dr.		5,000
	To Cash A/c				5,000
	(Payment of bill was made on its due date )