Question

On January 15, 2011, Raghu sold goods worth Rs. 35,000 to devendtra and dreq upto the latter three bills of exchanges. The first bill was for Rs. 5,000 payable after one month the second bill was For Rs. 20,000 Payable after three months and third bill for balance amount for 4 months. Raghu endrosed the first bill in favour of his creditor, Dewan in full settlement of a debt of Rs. 5,200. The second bill was discounted by Raghu at the rate of 6% per annum and the dishonoured the bill on maturity and the bank paid Rs. 30 as noting charges. Four days before the maturiey of hte third bill Raghu, sent the same for collection to his bank. The third bill was also dishonoured by Devendra and the bank paid Rs. 200 as noting charges. Five days after the dishonour of the bill. Devendra paid the entire amount due to RAghu along with interest Rs. 1,000 for this purpose Devendra obtained a short term loan from his bank.
You are requested to record the necessary Journal entries in the Books of Raghu, Devendra and Dewan and also prepare Devendra's account in Raghu's Book and Raghu's account in Devendra's Book.

Answer 1

In the Books of Raghu
$$\begin{array}{ccccc}\text{Date}& \text{Particular}& \text{LF}& \text{Amt.(Dr)}& \text{Amt. (Cr)}\\ 2011& & & & \\ \text{Jan 15}& \text{Devendra}\text{Dr}& & 35,000& \\ & \text{To Sales A/c}& & & 35,000\\ & \text{(Being goods sold to him)}& & & \\ & \underset{–}{}& & & \\ \text{Jan 15}& \text{Bills Receivable Ist A/c}\text{Dr}& & 5,000& \\ & \text{Bills Receivable IInd A/c}\text{Dr}& & 20,000& \\ & \text{Bills Receivable IIIrd A/c}\text{Dr}& & 10,000& \\ & \text{To Devendra}& & & 35,000\\ & \text{(Being Three acceptances received from Devendra)}& & & \\ & \underset{–}{}& & & \\ \text{Jan 15}& \text{Dewan}\text{Dr}& & 5,200& \\ & \text{To Bills Receivable Ist A/c}& & & 5,00\\ & \text{To Discount Received A/c}& & & 200\\ & \text{Being Acceptance of Devendra Endorsed}& & & \\ & \underset{–}{}& & & \\ \text{Jan 15}& \text{Bank A/c}\text{Dr}& & 19,7000& \\ & \text{Discount A/c}\text{Dr}& & 300& \\ & \text{To Bills Receivable IInd A/c}& & & 20,000\\ & \text{(Being bill discounted by the bank at rate 6\%)}& & & \\ & \underset{–}{}& & & \\ \text{Apr 18}& \text{Devendra}\text{Dr}& & 20,030& \\ & \text{To Bank A/c}& & & 20,030\\ & \text{(Being bill dishonoured noting paid by the bank)}& & & \\ & \underset{–}{}& & & \\ \text{may 14}& \text{Bill Sent for Collection A/c}\text{Dr}& & 10,000& \\ & \text{To Bills Receivable IIIrd A/c}& & & 10,000\\ & \text{(Being Bill sent for the collection)}& & & \\ & \underset{–}{}& & & \\ \text{May 18}& \text{Devendra}\text{Dr}& & 10,200& \\ & \text{To Bill sent for Collection A/c}& & & 10,000\\ & \text{To Bank A/c}& & & 200\\ & \text{(Being Bill sent for collection and bank paid Nothing )}& & & \\ & \underset{–}{}& & & \\ \text{May 23}& \text{Devendra}\text{Dr}& & 1,000& \\ & \text{To Interest A/c}& & & 1,000\\ & \text{(Being interesst due to Devendra)}& & & \\ & \underset{–}{}& & & \\ \text{May 23}& \text{Cash A/c}\text{Dr}& & 31,230& \\ & \text{To Devendra}& & & 31,230\\ & \text{(Being final payment received)}& & & \end{array}$$
Dr Devendra Account Cr

$$\begin{array}{cccccccc}\text{Date}& \text{Particulars}& \text{JF}& \text{Amt. (Rs.)}& \text{Date}& \text{Particular}& \text{JF}& \text{Amt. (Rs.)}\\ \text{2011}& & & & 2011& & & \\ \text{Jan 15}& \text{To Sales A/c}& & 35,000& \text{Jan 15}& \text{By Bill}& & \\ & & & & & \text{Receivable Ist}& & \\ & & & & & \text{A/c}& & 5,000\\ \text{Apr 18}& \text{To Bank A/c}& & 20,030& \text{Jan 15}& \text{By Bill}& & \\ & & & & & \text{Receivable IInd}& & \\ & & & & & \text{A/c}& & 20,000\\ \text{May 18}& \text{To Bill Sent for}& & & \text{Jan 15}& \text{By Bill}& & \\ & \text{Collection A/c}& & 10,000& & \text{Receivable IIIrd}& & \\ & & & & & \text{A/c}& & 10,000\\ \text{May 18}& \text{To Bank A/c}& & 200& \text{May 23}& \text{By Cash A/c}& & 31,230\\ \text{may 23}& \text{To Interest A/c}& & 1,000& & & & \\ & & & \underset{–}{}& & & & \underset{–}{}\\ & & & 66,230& & & & 66,230\\ & & & \underset{–}{}& & & & \underset{–}{}\end{array}$$
In the Books of Devendra Journal Entries
$$\begin{array}{ccccc}\text{Date}& \text{Particular}& \text{LF}& \text{Amt.(Dr)}& \text{Amt (Dr)}\\ 2011& & & & \\ \text{Jan 15}& \text{Purchase A/c}\text{Dr}& & 35,000& \\ & \text{To Raghu}& & & 35,000\\ & \text{(Being goods purchased from Raghu)}& & & \\ \text{Jan 15}& \text{Raghu}\text{Dr}& & 35,000& \\ & \text{To Bills Payable Ist A/c}& & & 5000\\ & \text{To Bills Payiable IInd A/c}& & & 20,000\\ & \text{To Bills Payable IIIrd A/c}& & & 10,000\\ & \text{(Being bill dishonoured on due date)}& & & \\ & \underset{–}{}& & & \\ \text{Feb 18}& \text{Bills Payable A/c}\text{Dr}& & 5,000& \\ & \text{To Cash}& & & 5,000\\ & \text{(Being bill dishonoured on due date)}& & & \\ & \underset{–}{}& & & \\ \text{Feb 8}& \text{Bills Payable A/c}\text{Dr}& & 20,000& \\ & \text{To cash}& & & 5,000\\ & \text{(Being bill dishonured on due date)}& & & \\ \text{Apr 8}& \text{Bills Payable A/c}\text{Dr}& & 20,000& \\ & \text{Noting Charges A/c}\text{Dr}& & 30& \\ & \text{To Raghu}& & & 20,030\\ & \text{(Being bill dishonoured noting charges paid by raghu)}& & & \\ & \underset{–}{}& & & \\ \text{May 18}& \text{Bills Payable A/c}\text{Dr}& & 10,000& \\ & \text{Noting Charge A/c}\text{Dr}& & 200& \\ & \text{To Raghu}& & & 10,200\\ & \text{(Being bill dishonoured noting charge paid by bank)}& & & \\ & \underset{–}{}& & & \\ \text{May 23}& \text{Interest A/c}\text{Dr}& & 1000& \\ & \text{To Raghu}& & & 1000\\ & \text{(Being interest due to Raghu)}& & & \\ & \underset{–}{}& & & \\ \text{May 23}& \text{Cash A/c}\text{Dr}& & 31,230& \\ & \text{To Bank Loan A/c}& & & 31,230\\ & \text{Being short term bank loan taken for the purpose}& & & \\ & \underset{–}{}& & & \\ \text{May 23}& \text{Raghu}\text{Dr}& & 31,230& \\ & \text{To Cash A/c}& & & 31,230\\ & \text{(Being payment made to Raghu)}& & & \\ & \underset{–}{}& & & \end{array}$$
Raghu's Account
$$\begin{array}{cccccccc}\text{Date}& \text{Particular}& \text{JF}& \text{Amt.(Rs.)}& \text{Date}& \text{Particulars}& \text{JF}& \text{Amt. (Rs.)}\\ \text{2011}& & & & & & & \\ \text{Jan 15}& \text{To Bills Payable}& & & \text{Jan 15}& \text{By Purchase}& & \\ & \text{Ist A/c}& & 5,000& & \text{A/c}& & 35,000\\ \text{Jan 15}& \text{To Bills Payable}& & & \text{Apr 18}& \text{By Bills Payable}& & \\ & \text{IInd A/c}& & 20,000& & \text{IInd A/c}& & 20,000\\ \text{Jan 15}& \text{To Bills Payable}& & & \text{Apr 18}& \text{By Noting}& & \\ & \text{IIIrd A/c}& & 10,000& & \text{Charges A/c}& & 30\\ \text{May 23}& \text{To Cash A/c}& & 31,230& \text{May 18}& \text{By Bills Payable}& & \\ & & & & & \text{IIIrd A/c}& & 10,000\\ & & & & \text{May 19}& \text{By Noting}& & \\ & & & & & \text{Charges A/c}& & 200\\ & & & & \text{May 18}& \text{By Interest A/c}& & 1,000\\ & & & \underset{–}{}& & & & \underset{–}{}\\ & & & 66,230& & & & 66,230\\ & & & \underset{–}{}& & & & \underset{–}{}\end{array}$$
In The Books of Dewan Journal Entries
$$\begin{array}{ccccc}\text{Date}& \text{Particular}& \text{LF}& \text{Amt.(Dr)}& \text{Amt (Dr)}\\ 2011& & & & \\ \text{Jan 15}& \text{Bills Receivable A/c}\text{Dr}& & 5,000& \\ & \text{Discount Allowed A/c}\text{Dr}& & 200& \\ & \text{To Raghu}& & & 5,200\\ & \text{(Being Bills received from Raghu)}& & & \\ & \underset{–}{}& & & \\ \text{Feb 18}& \text{Cash A/c}\text{Dr}& & 5,000& \\ & \text{To Bills Receivable A/c}& & & 5,000\\ & \text{(Being bill met on maturity)}& & & \\ & & & & \end{array}$$