Question

Vimal purchased goods Rs 25,000 from Kamal on Jan 15, 2016 and accepted a bill of exchange drawn upon him by Kamal payable after two months. On the date of the maturity the bill was duly presented for payment. Vimal dishonoured the bill. record the necessary journal entries in the books of Kamal and Vimal when.

• The bill was retained by Kamal till the date of its maturity.

• The bill was immediately discounted by Kamal with his bank @ 6% p.a.

• The bill was endorsed by Kamal in favour of his creditor Sharad.

• Five days before its maturity the bill was sent by Kamal to his bank for collection.

Answer 1

Case (i) : The bill was retained by Kamal till the date of its maturity

Books of Kamal Journal
Date		Particulars		L.F.	Debit Amount Rs	Credit Amount Rs
2016
Jan.15	Vimal		Dr.		25,000
		To Sales A/c				25,000
	(Goods sold to Vimal)
Jan.15	Bills Receivable A/c		Dr.		25,000
		To Vimal				25,000
	(Vimal's acceptance reccived)
Mar.18	Vimal		Dr.		25,000
		To Bills Receivable A/c				25,000
	(Vimal acceptance dishonoured)

Books of Vimal Journal
Date	Particulars				L.F.	Debit Amount Rs	Credit Amount Rs
2016
Jan.15	Purchases A/c			Dr.		25,000
			To Kamal				25,000
	(Goods bought from Kamal)
Jan.15	Kamal			Dr.		25,000
		To Bills Payable A/c					25,000
	(Bill drawn by Kamal accepted)
Mar.18	Bills Payable A/c			Dr.		25,000
		To Kamal					25,000
	(Bill drawn by Kamal dishonoured)

Case (ii) : The bill was immediately discounted by Kamal with his bank @ 6% p.a.

Books of Kamal Journal
Date		Particulars		L.F.	Debit Amount Rs	Credit Amount Rs
2016
Jan.15	Vimal		Dr.		25,000
		To Sales A/c				25,000
	(Goods sold to Vimal)
Jan.15	Bills Receivable A/c		Dr.		25,000
		To Vimal				25,000
	(Vimal's acceptance received)
Jan.15	Bank A/c		Dr.		24,750
	Discount A/c		Dr.		250
		To Bills Receivable A/c				25,000
	(Vimal's acceptance discounted at 6% p.a. with bank)
Mar.18	Vimal		Dr.		25,000
		To Bank A/c				25,000
	(Vimal's aceptance dishonoured)

Books of Vimal Journal
Date		Particulars			L.F.	Debit Amount Rs	Credit Amount Rs
2016
Jan.15	Purchases A/c			Dr.		25,000
			To Kamal				25,000
	(Goods bought from Kamal)
Jan.15	Kamal			Dr.		25,000
		To Bills Payable A/c					25,000
	(Bill drawn by Kamal accepted)
Mar.18	Bills Payable A/c			Dr.		25,000
		To Kamal					25,000
	(Bill drawn by Kamal dishonoured)

Case (iii) : The bill was endorsed by Kamal in favour of his creditor Sharad

Books of Kamal Journal
Date		Particulars			L.F.	Debit Amount Rs	Credit Amount Rs
2016
Jan.15	Vimal			Dr.		25,000
		To Sales A/c					25,000
	(Goods sold to Vimal)
Jan.15	Bills Receivable A/c			Dr.		25,000
		To Vimal					25,000
	(Vimal's acceptence received)
Jan.15	Sharad			Dr.		25,000
		To Bills Receivable A/c					25,000
	(Vimal's acceptance endorsed to Sharad)
Mar.18	Vimal			Dr.		25,000
		To Sharad					25,000
	(Vimal's acceptance endorsed to Kamal dishonoured)

Books of Vimal Journal
Date		Particulars			L.F.	Debit Amount Rs	Credit Amount Rs
2016
Jan.15	Purchases A/c			Dr.		25,000
			To Kamal				25,000
	(Goods bought from Kamal)
Jan.15	Kamal			Dr.		25,000
		To Bills Payable A/c					25,000
	(Bill drawn by Kamal accepted)
Mar.18	Bills Payable A/c			Dr.		25,000
		To Kamal					25,000
	(Bill drawn by Kamal dishonoured)

Case (iv) : Five days before its maturity the bill was sent by Kamal to his bank for collection

Books of Kamal Journal
Date		Particulars		L.F.	Debit Amount Rs	Credit Amount Rs
2016
Jan.15	Vimal		Dr.		25,000
		To Sales A/c				25,000
	(Goods sold to Vimal)
Jan.15	Bills Receivable A/c		Dr.		25,000
		To Vimal				25,000
	(Vimal's acceptance received, payable after two months)
Mar.13	Bill Sent for Collection A/c		Dr.		25,000
		To Bills Receivable A/c				25,000
	(Vimal's acceptance sent to bank for collection)
Mar.18	Vimal		Dr.		25,000
		To Bill Sent for Collection				25,000
	(Vimal's acceptance dishonoured)

Books of Vimal Journal
Date		Particulars			L.F.	Debit Amount Rs	Credit Amount Rs
Case (iii)
2016
Jan.15	Purchases A/c			Dr.		25,000
			To Kamal				25,000
	(Goods bought from Kamal)
Jan.15	Kamal			Dr.		25,000
		To Bills Payable A/c					25,000
	(Bill drawn by Kamal accepted)
Mar.18	Bills Payable A/c			Dr.		25,000
		To Kamal					25,000
	(Bill drawn by Kamal dishonoured)