Raja made sales goods worth Rs. 40,000 to Pradhan and received a part payment of Rs. 10,000. On the same date, Raju drew on Pradhan a three month's bill for Rs. 30,000, received the acceptance on the bill and sent the bill to the bank for collection immediately.
However, on the due date, the bill was dishonoured due to Pradhan's insolvency and only 50% of the amount due could be recovered from his private estate as the first and final dividend.
Give Journal Entries Pradhan's Account in the books Raja.

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Solution

Journal Entries In the books of Raja
Date/ SR. No. Particular LF
Debit (Rs.) Credit (Rs.)
1 Cash a/c dr
Pradhan a/c dr
To sales a/c
(Being goods sold on cash and credit) 10000
30000
40000
2 Bills receivable a/c dr
To Bills receivable a/c dr
(Being Bill sent for bank for collection) 30000
30000
3 Bill sent for collection a/c dr
To Bills receivable a/c
(Being Bill sent for bank for collection) 30000
30000
4 Pradhans a/c dr
To Bill sent for collection a/c
(Being bill cancelled on insolvency) 30000
30000
5 Cash debts a/c dr
Bad debts a/c dr
To Pradhans a/c
(Being 50% cash recevied on prabhans in insolvency) 15000
15000
30000
160000 160000
In the Books of Raja
Pradhans A/c
Particulars Rs. Particulars Rs.
To sales a/c 30000 By Bills receivable a/c 30000
To Bill sent for Collection a/c 30000 By cash a/c 15000
By Bad debts a/c 15000
Total 60000 Total 60000

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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.

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

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Date/ SR. No.	Particular	LF	Debit (Rs.)	Credit (Rs.)
1	Cash a/c dr Pradhan a/c dr To sales a/c (Being goods sold on cash and credit)		10000 30000	40000
2	Bills receivable a/c dr To Bills receivable a/c dr (Being Bill sent for bank for collection)		30000	30000
3	Bill sent for collection a/c dr To Bills receivable a/c (Being Bill sent for bank for collection)		30000	30000
4	Pradhans a/c dr To Bill sent for collection a/c (Being bill cancelled on insolvency)		30000	30000
5	Cash debts a/c dr Bad debts a/c dr To Pradhans a/c (Being 50% cash recevied on prabhans in insolvency)		15000 15000	30000
			160000	160000

Pradhans A/c
Particulars	Rs.	Particulars	Rs.
To sales a/c	30000	By Bills receivable a/c	30000
To Bill sent for Collection a/c	30000	By cash a/c	15000
		By Bad debts a/c	15000
Total	60000	Total	60000