On 21st Sept. 2017, Radhika sold goods for ₹ 2,00,000 to Parvati and drew upon later a bill for the same amount payable after 3 months. The bill was accepted by Parvati, Radhika discounted the bill from bank at a discount of 15% p.a. on 21st Oct., 2017. On maturity, the bill was dishonoured. Parvati agreed to pay ₹ 1,20,000 in cash including ₹ 3,000 interest and accepted a new bill for 3 months. The new bill was endorsed to Gayatri in full settlement of his account ₹ 85,000. It was duly met on maturity. Pass entries in the books of Radhika.

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Solution

Journal

in the books of Radhika (Drawer)

Date

Particulars

L.F.

Debit

Amount

(₹)

Credit

Amount

(₹)

2017

Sept 21

Parvati’s A/c

Dr.

2,00,000

To Sales A/c

2,00,000

(Goods sold to Parvati)

Sept 21

Bills ReceivableA/c

Dr.

2,00,000

To Parvati’s A/c

2,00,000

(Bill received)

Oct 21

Bank A/c

Dr.

1,95,000

Discounting Charges A/c

Dr.

5,000

To Bills Receivable A/c

2,00,000

(Bill discounted @ 15% for 2 months)

Dec 24

Parvati’s A/c

Dr.

2,00,000

To Bank A/c

2,00,000

(Bill dishonoured)

Dec 24

Parvati’s A/c

Dr.

3,000

To Interest A/c

3,000

(Interest due)

Dec 24

Cash A/c

Dr.

1,20,000

Bill Receivable A/c

Dr.

83,000

To Parvati’s A/c

2,03,000

(Cash and new bill received from Parvati)

Dec 24

Gayatri’s A/c

Dr.

85,000

To Bills Receivable A/c

83,000

To Discount Received A/c

2,000

(New bill endorsed in full settlement)

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Journal in the books of Radhika (Drawer)
Date	Particulars		L.F.	Debit Amount (₹)	Credit Amount (₹)
2017
Sept 21	Parvati’s A/c	Dr.		2,00,000
	To Sales A/c				2,00,000
	(Goods sold to Parvati)

Sept 21	Bills ReceivableA/c	Dr.		2,00,000
	To Parvati’s A/c				2,00,000
	(Bill received)

Oct 21	Bank A/c	Dr.		1,95,000
	Discounting Charges A/c	Dr.		5,000
	To Bills Receivable A/c				2,00,000
	(Bill discounted @ 15% for 2 months)

Dec 24	Parvati’s A/c	Dr.		2,00,000
	To Bank A/c				2,00,000
	(Bill dishonoured)

Dec 24	Parvati’s A/c	Dr.		3,000
	To Interest A/c				3,000
	(Interest due)

Dec 24	Cash A/c	Dr.		1,20,000
	Bill Receivable A/c	Dr.		83,000
	To Parvati’s A/c				2,03,000
	(Cash and new bill received from Parvati)

Dec 24	Gayatri’s A/c	Dr.		85,000
	To Bills Receivable A/c				83,000
	To Discount Received A/c				2,000
	(New bill endorsed in full settlement)