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Question

On January 15, 2011, Kartar sold goods for Rs. 30,000 to Bhagwan and drew upon him three bills of exchanges of Rs. 10,000 each payable after one month, two months and three months respectively. The first bill was retained by Kartar till its maturity. The second bill was endorsed by him in favour of his creditor Ratna and the third bill was discounted by him immediately at the rate of 6% per annum. All the bills were met by Bhagwan. Journalise the above transactions in the books of Kartar and Bhagwan. Also, prepare ledger accounts in the books of Kartar and Bhagwan.

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Solution

In the Books of Kartar
Journal Entries
DateParticularsL.F.Amt. (Dr.)Amt. (Cr.)2011Jan 15Bhagwan's A/cDr.30,000 To Sales A/c30,000(Goods sold to Bhagwan) –––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––Jan 15Bills Receivable Ist A/cDr.10,000Bills Receivable IInd A/cDr.10,000Bills Receivable IIIrd A/cDr.10,000 To Bhagwan's A/c30,000(Three acceptance received each for 10,000) –––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––Jan 15Ratan's A/cDr.10,000 To Bills Receivable IInd A/c10,000(Second bill endorsed in favour of Ratan) –––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––Jan 15Bank A/cDr.9,850Discount A/cDr.150 To Bills Receivable IIIrd A/c10,000(Third bill discounted by the bank at the rate of 6%per annum –––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––Feb 18Cash A/cDr.10,000 To Bills Receivable Ist A/c10,000(First bill met on due date)

Dr. Bhagwan's Account Cr.

DateParticularsJ.F.Amt. (Rs.)DateParticularsJ.F.Amt. (Rs.)20112011Jan 15Sales A/c30,000Jan 15Bills10,000Receivable IstBills10,000Receivable IIndBills10,000Receivable IIIrd¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯30,000––––––¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯30,000––––––

In the Books of Bhagwan
Journal Entries

DateParticularsLFAmt. (Dr)Amt. (Cr)2011Jan 15Purchase A/cDr30,000To Kartar30,000(Goods purchased) –––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––Jan 15KartarDr.30,000 To Bills Payable Ist A/c10,000 To Bills Payable IInd A/c10,000 To Bills Payable IIIrd A/c10,000(Three acceptance received each for 10,000) –––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––Feb 18Bills Payable IInd A/cDr.10,000 To Cash A/c10,000(First bill paid on maturity) –––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––Mar 18Bills Payable IInd A/cDr10,000 To Bank A/c10,000(Second bill met on maturity) –––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––Apr 18Bills Payable IIIrd A/cDr.10,000 To Bank A/c10,000(Third bill met on maturity)

Dr. Kartar's Account Cr.

DateParticularsJ.F.Amt. (Rs.)DateParticularsJ.F.Amt. (Rs.)20112011Jan 15Bills Payable Ist10,000Jan 15Purchases A/c30,000Bills Payable 10,000IIndBills Payable10,000IIIrd¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯30,000––––––¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯30,000––––––


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