Question

PRACTICAL PROBLEMS

Sushant owes Surekha Rs 1,25,000 Surekha draws a bill for Rs 1,00,000 on Sushant for 4 months period and received the cheque for the balance. The bill is duly accepted and returned by Sushant. On the same date Surekha endorsed Sushant’s acceptance to Suresh.

On the due date Suresh informed Surekha that Sushant dishonoured his acceptance and Rs 3,175 paid as noting charges Surekha then drew a new bill for 3 month on Sushant including noting charges and interest Rs 4,000. On the due date bill was duly honoured by Sushant.

Write Journal entries in the books of Surekha and prepare Surekha’s account in the books of Sushant.

Answer 1

Books of Surekha
Journal Entry
Date	Particulars		L.F.	Debit Amount Rs	Credit Amount Rs
	Bank A/c	Dr.		25,000
	Bills Receivable A/c	Dr.		1,00,000
	To Sushant				1,25,000
	(Bill drawn and accepted and rest of the amount received in Cash)
	Suresh	Dr.		1,00,000
	To Bills Receivable A/c				1,00,000
	(Bill endorsed to Suresh, a creditor)
	Sushant	Dr.		1,03,175
	To Suresh				1,03,175
	(Bill endorsed to Suresh, dishonoured and noting charges of Rs 3,175 paid)
	Bills Receivable A/c	Dr.		1,07,175
	To Sushant				1,03,175
	To Interest A/c				4,000
	(New bill drawn and accepted including interest of Rs 4,000)
	Cash/Bank A/c	Dr.		1,07,175
	To Bills Receivable A/c				1,07,175
	(Bill honoured on due date)

In the Books of Sushant
Surekha’s Account
Dr.	Cr.
Date		Particulars	J.F.	Amount (Rs)	Date	Particulars	J.F.	Amount (Rs)
		Bank A/c		25,000		Balance b/d		1,25,000
		Bills Payable A/c		1,00,000		Bills Payable A/c		1,00,000
		Bills Payable		1,07,175		Noting Charges A/c		3,175
						Interest A/c		4,000
				2,32,175				2,32,175