Question

On 1st January, 2018 for goods sold, Ramesh drew a Bill of Exchange on Mahesh for ₹ 4,000, for a period of 3 months. Mahesh accepts it and returns to Ramesh. Ramesh then endorses it to Mukesh who in turn endorses it to Suresh on 1st February, 2018. The bill is then discounted by Suresh on the same date with his banker at 5% p.a. On the due date the bill is dishonoured.
Pass the necessary Journal entries in the books of all the four parties.

Answer 1

Books of Ramesh
Journal
Date	Particulars		L.F.	Debit Amount Rs	Credit Amount Rs
2018
Jan.01	Mahesh	Dr.		4,000
	To Sales A/c				4,000
	(Goods were sold to Mahesh)
Jan.01	Bills Receivable A/c	Dr.		4,000
	To Mahesh				4,000
	(Mahesh’s acceptance was received)
Jan.01	Mukesh	Dr.		4,000
	To Bills Receivable A/c				4,000
	(Mahesh’s acceptance was endorsed in favour of Mukesh)
April 04	Mahesh	Dr.		4,000
	To Mukesh				4,000
	(Mahesh’s acceptance was dishonoured)

Books of Mahesh
Journal
Date	Particulars		L.F.	Debit Amount Rs	Credit Amount Rs
2018
Jan.01	Purchases A/c	Dr.		4,000
	To Ramesh				4,000
	(Goods were bought from Ramesh)
Jan.01	Ramesh	Dr.		4,000
	To Bills Payable A/c				4,000
	(Bill drawn by Ramesh was accepted)
April 04	Bills Payable A/c	Dr.		4,000
	To Ramesh				4,000
	(Bill Payable was dishonoured)

Books of Mukesh
Journal
Date	Particulars		L.F.	Debit Amount Rs	Credit Amount Rs
2018
Jan.01	Bills Receivable A/c	Dr.		4,000
	To Ramesh				4,000
	(Bill received from Ramesh)
Feb.01	Suresh	Dr.		4,000
	To Bills Receivable A/c				4,000
	(Bills which had received from Suresh, endorsed to Suresh)
April 04	Ramesh	Dr.		4,000
	To Suresh				4,000
	(Bill received from Ramesh was dishonoured)

Books of Suresh
Journal
Date	Particulars		L.F.	Debit Amount Rs	Credit Amount Rs
2018
Feb.01	Bills Receivable A/c	Dr.		4,000
	To Mukesh				4,000
	(Bill Receivable received from Mukesh)
Feb.01	Bank A/c	Dr.		3,967
	Discount Charges A/c	Dr.		33
	To Bills Receivable A/c				4,000
	(Bill discount with bank at 5% p.a. for two months)
April 04	Mukesh	Dr.		4,000
	To Bank A/c				4,000
	(Bill received from Mukesh was dishonoured)