Question

On Jan. 01, 2016, Bhanu and Naman drew on each other a bill for Rs 8,000 payable 3 months after the due date for their Mutual benefit. On January 02 they discounted with their bank each other’s bill at 5% p.a. on the due date each met his own acceptance. Give journal entry in the books of Bhanu and Naman.

Answer 1

Books of Bhanu Journal
Date		Particulars					L.F.	Debit Amount Rs	Credit Amount Rs
2016
Jan.01	Bills Receivable A/c					Dr.		8,000
		To Naman							8,000
	(Received Naman's acceptance for mutual help)
Jan.01	Naman				Dr.			8,000
		To Bills Payable A/c							8,000
	(Naman's acceptance accepted, payable after 3 months for mutual help)
Jan.01	Bank A/c		Dr.					7,900
	Discount A/c		Dr.					100
		To Bills Receivable A/c							8,000
	(Naman's acceptance discounted at 5% p.a. with bank for three months)
Apr.04	Bills Payable A/c		Dr.					8,000
		To Bank A/c							8,000
	(Naman's acceptance cleared)

Books of Naman Journal
Date		Particulars		L.F.	Debit Amount Rs	Credit Amount Rs
2016
Jan.01	Bills Receivable A/c		Dr.		8,000
		To Bhanu				8,000
	(Bhanu's acceptance received for mutual help)
Jan.01	Bhanu		Dr.		8,000
		To Bills Payable A/c				8,000
	(Bill drawn by Bhanu payable after 3 months accepted for mutual help)
Jan.01	Bank A/c		Dr.		7,900
	Discount A/c		Dr.		100
		To Bills Receivable A/c				8,000
	(Bhanu's acceptance discounted at 8% p.a. for three months with bank)
Apr.04	Bills Payable A/c		Dr.		8,000
		To Bank A/c				8,000
	(Bill drawn by Bhanu discharged on due date)