Question

On 1st January, 2106 X sold goods to Y for Rs. 20,000 less $2\%$ cash discount. Y paid $50\%$ price immediately and X drew a bill on Y for two months for the balance. This bill is duly accepted by Y. The bill was dishonoured on the due date and X paid Rs. 100 as nothing charges. Y paid the amount due to X by cheque after ten days. Pass entries in the books of both the parties.

Answer 1

In the Books of X
JOURNAL
$\begin{array}{ccccc}\text{Date}& \text{Particulars}& L.F.& \text{Amt. (Dr.)}& \text{Amt. (Cr.)}\\ 2016& & & & \\ \text{Jan 1}& \text{Y's A/c}\text{Dr.}& & 20,000& \\ & \text{To Sales A/c}& & & 20,000\\ & \underset{–}{\text{(Goods sold to Y)}}& & & \\ \text{Jan 1}& \text{Cash A/c}\text{Dr.}& & 9,800& \\ & \text{Discount Allowed A/c}(10,000\times 2\%)\text{Dr.}& & 200& \\ & \text{To Y's A/c}(20,000\times 50\%)& & & 10,000\\ & \underset{–}{\text{(Cash received from Y and discount allowed at 2\%)}}& & & \\ \text{Jan 1}& \text{Bills Receivable A/c}\text{Dr}.& & 10,000& \\ & \text{To Y's A/c}& & & 10,000\\ & \underset{–}{\text{(Acceptance received for 2 months)}}& & & \\ \text{Mar 4}& \text{Y's A/c}\text{Dr.}& & 10,100& \\ & \text{To Bills Receivable A/c}& & & 10,000\\ & \text{To Cash A/c}& & & 100\\ & \underset{–}{\text{(Bill dishonoured and noting charges paid)}}& & & \\ \text{Mar 14}& \text{Bank A/c}\text{Dr.}& & 10,100& \\ & \text{To Y's A/c}& & & 10,100\\ & \text{(Amount received)}& & & \end{array}$

In the Books of Y
JOURNAL
$\begin{array}{ccccc}\text{Date}& \text{Particulars}& L.F.& \text{Amt. (Dr.)}& \text{Amt. (Cr.)}\\ 2016& & & & \\ \text{Jan 1}& \text{Purchases A/c}\text{Dr.}& & 20,000& \\ & \text{To X's A/c}& & & 20,000\\ & \underset{–}{\text{(Goods purchased from X)}}& & & \\ \text{Jan 1}& \text{X's A/c}\text{Dr.}& & 10,000& \\ & \text{To Cash A/c}& & & 9,800\\ & \text{To Discount Received A/c}& & & 200\\ & \underset{–}{\text{(Cash paid to X and discount received at 2\%)}}& & & \\ \text{Jan 1}& \text{X's A/c}\text{Dr.}& & 10,000& \\ & \text{To Bills Payable A/c}& & & 10,000\\ & \underset{–}{\text{(Acceptance given for 2 months)}}& & & \\ \text{Mar 4}& \text{Bills Payable A/c}\text{Dr.}& & 10,000& \\ & \text{Noting Charges A/c}\text{Dr.}& & 100& \\ & \text{To X's A/c}& & & 10,100\\ & \underset{–}{\text{(Bill dishonoured and noting charges paid by X)}}& & & \\ \text{Mar 14}& \text{X's A/c}\text{Dr.}& & 10,100& \\ & \text{To Bank A/c}& & & 10,100\\ & \text{(Amount paid)}& & & \end{array}$