Question

On January 1, 2011, Arun sold goods for Rs. 30,000 to Sunil. 50% of the payment was made immediately by Sunil on which Arun allowed a cash discount of 2%. For the balance, Sunil drew a bill in favour of Arun payable after 20 days. Since, the date of maturity of bill was a public holiday, Arun presented the bill on a day, as per the provisions of Negotiable Instrument Act which was met by Sunil.

State the date on which the bill was presented by Arun for payment and Journalise the above transactions in the books of Arun and Sunil.

Answer 1

In the Books of Arun
Journal Entries

$\begin{array}{cccccc}\text{Date}& \text{Particulars}& & \text{L.F.}& \text{Amt. (Dr.)}& \text{Amt. (Cr.)}\\ \text{2011}& & & & & \\ \text{Jan 1}& \text{Sunil's A/c}& \text{Dr.}& & \text{30,000}& \\ & \text{To Sales A/c}& & & & \text{30,000}\\ & \text{(Goods sold to Sunil)}& & & & \\ & \underset{–}{}& & & & \\ \text{Jan 1}& \text{Cash A/c}& \text{Dr.}& & \text{14,700}& \\ & \text{Discount A/c}& \text{Dr.}& & \text{300}& \\ & \text{To Sunil's A/c}& & & & \text{15,000}\\ & \text{(}50\%\text{of sales amount with}2\%\text{cash}& & & & \\ & \text{discount and acceptance of rest}50\%\text{bill}& & & & \\ & \text{amount received)}& & & & \\ & \underset{–}{}& & & & \\ \text{Jan 23}& \text{Cash A/c}& \text{Dr.}& & \text{15,000}& \\ & \text{To Bills Receivable A/c}& & & & \\ & \text{(Payment received on maturity)}& & & & \text{15,000}\end{array}$

Note : Date of maturity in this case will be 24rd January. But 24 January is a public holiday that's why maturity date will be one day before i.e., 23 January.

In the Books of Sunil
Journal Entries

$\begin{array}{cccccc}\text{Date}& \text{Particulars}& & \text{L.F.}& \text{Amt. (Dr.)}& \text{Amt. (Cr.)}\\ \text{2011}& & & & & \\ \text{Jan 1}& \text{Purchase A/c}& \text{Dr.}& & \text{30,000}& \\ & \text{To Arun}& & & & \text{30,000}\\ & \text{(Goods purchased)}& & & & \\ & \underset{–}{}& & & & \\ & & & & & \\ \text{Jan 1}& \text{Arun}& \text{Dr.}& & \text{15,000}& \\ & \text{To Cash A/c}& & & & \text{14,700}\\ & \text{To Discount A/c}& & & & 300\\ & \text{(}50\%\text{of sales amount paid and}2\%\text{discount received)}& & & & \\ & \underset{–}{}& & & & \\ \text{Jan 1}& \text{Arun}& \text{Dr.}& & \text{15,000}& \\ & \text{To Bills Payable A/c}& & & & \text{15,000}\\ & \text{(Acceptance given)}& & & & \\ & \underset{–}{}& & & & \\ \text{Jan 23}& \text{Bills Payable A/c}& \text{Dr.}& & \text{15,000}& \\ & \text{To Cash A/c}& & & & \text{15,000}\\ & \text{(Payment made on maturity)}& & & & \end{array}$