Question

On Jan. 1,2017, Tarun purchased goods from Arun for ₹ 20,000 and immediately drew a promissory note in favour of Arun payable after 1 month. Date of maturity of the promissory note was declared emergency holiday by the Government of India under the Negotiable Instrument Act 1881. Tarun met the promissory note according to the provisions of law.
Pass the necessary Journal entries in the books of Arun and Tarun.

Answer 1

Books of Arun Journal
Date	Particulars		L.F.	Debit Amount (Rs)	Credit Amount (Rs)
2017
Jan. 01	Tarun	Dr.		20,000
	To Sales A/c				20,000
	(Goods sold to Tarun)
Jan. 01	Bills Receivable A/c	Dr.		20,000
	To Tarun				20,000
	(Tarun accepted the promissory note)
Feb. 05	Cash A/c	Dr.		20,000
	To Bills Receivable A/c				20,000
	(Promissory note honoured on maturity)

Books of Tarun Journal
Date	Particulars		L.F.	Debit Amount (Rs)	Credit Amount (Rs)
2017
Jan. 01	Purchases A/c	Dr.		20,000
	To Arun				20,000
	(Goods purchased from Arun)
Jan. 01	Arun	Dr.		20,000
	To Bills Payable A/c				20,000
	(Promissory note drawn by Arun, accepted)
Feb. 05	Bills Payable A/c	Dr.		20,000
	To Cash A/c				20,000
	(Promissory note honoured on maturity)

Note: When due date falls on Emergency holiday (here February 04, 2017), then due date is succeeding date i.e. February 05, 2017.