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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.

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Solution

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 )


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