Question

Vimal purchased goods Rs. 25,000 from Kamal on January 15, 2011 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
I. The bill was retained by Kamal till the date of its maturity.
II. The bill was immediately discounted by Kamal with his bank at the rate of 6% per annum.
III. 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

In the Books of Kamal Journal Entries
When the bill was retained by kamal till rhe date of its maturity
$$\begin{array}{ccccc}\text{Date}& \text{Particular}& \text{LF}& \text{Amt.(Dr)}& \text{Amt (Dr)}\\ 2011& & & & \\ \text{Jan 15}& \text{Vimal}\text{Dr}& & & \\ & \text{To Sales A/c}& & & 25,000\\ & \text{(Being goods sold to Vimal)}& & & \\ & \underset{–}{}& & & \\ \text{Jan 15}& \text{Bills Receivable A/c}\text{Dr}& & 25,000& \\ & \text{To Vimal}& & & 25,000\\ & \text{(Being Acceptance received)}& & & \\ & \underset{–}{}& & & \\ \text{Mar 18}& \text{Vimal}\text{Dr}& & 25,000& \\ & \text{To Bills Receivable A/c}& & & 25,000\\ & \text{(Being Bill dishonoured )}& & & \end{array}$$
When the bill was immediately discounted by Kamal at the rate of 6%
$$\begin{array}{ccccc}\text{Date}& \text{Particular}& \text{LF}& \text{Amt.(Dr)}& \text{Amt (Dr)}\\ \text{Jan 15}& \text{Vimal}\text{Dr}& & 25,000& \\ & \text{To Sales A/c}& & & 25,000\\ & \text{(Being Goods sold to vimal)}& & & \\ & \underset{–}{}& & & \\ \text{Jan 15}& \text{Bills Receivable A/c}\text{Dr}& & 25,000& \\ & \text{To Vimal}& & & 25,000\\ & \text{(Being Acceptance received)}& & & \\ & \underset{–}{}& & & \\ \text{Jan 15}& \text{Bank A/c}\text{Dr}& & 24,750& \\ & \text{Discound A/c}\text{Dr}& & 250& \\ & \text{To Bills Receivable A/c}& & & 25,000\\ & \text{(Being bill discounted at the rate of 6\%)}& & & \\ & \underset{–}{}& & & \\ \text{Mar 18}& \text{Vimal}\text{Dr}& & 25,000& \\ & \text{To Bank A/c}& & & 25,000\\ & \text{(Being Bill Disonoured on due date)}& & & \end{array}$$
When the bill was endorsed to sharad
$$\begin{array}{ccccc}\text{Date}& \text{Particular}& \text{LF}& \text{Amt.(Dr)}& \text{Amt (Dr)}\\ \text{Jan 15}& \text{Vimal}\text{Dr}& & 25,000& \\ & \text{To Sales A/c}& & & 25,000\\ & \text{(Being Goods sold to vimal)}& & & \\ & \underset{–}{}& & & \\ \text{Jan 15}& \text{Bills Receivable A/c}\text{Dr}& & 25,000& \\ & \text{To Vimal}& & & 25,000\\ & \text{(Being Acceptance received)}& & & \\ & \underset{–}{}& & & \\ \text{Jan 15}& \text{Sharad}\text{Dr}& & 25,000& \\ & \text{To Bills Receivable A/c}& & & 25,000\\ & \text{(Being bill Endorsed to Sharad)}& & & \\ & \underset{–}{}& & & \\ \text{Mar 18}& \text{Vimal}\text{Dr}& & 25,000& \\ & \text{To Sharad}& & & 25,000\\ & \text{(Being Bill Disonoured on due date)}& & & \end{array}$$
When the bill was sent for collection
$$\begin{array}{ccccc}\text{Date}& \text{Particular}& \text{LF}& \text{Amt.(Dr)}& \text{Amt (Dr)}\\ \text{Jan 15}& \text{Vimal}\text{Dr}& & 25,000& \\ & \text{To Sales A/c}& & & 25,000\\ & \text{(Being Goods sold to vimal)}& & & \\ & \underset{–}{}& & & \\ \text{Jan 15}& \text{Bills Receivable A/c}\text{Dr}& & 25,000& \\ & \text{To Vimal}& & & 25,000\\ & \text{(Being Acceptance received)}& & & \\ & \underset{–}{}& & & \\ \text{Jan 13}& \text{Bill Sent for collection A/c}\text{Dr}& & 25,000& \\ & \text{To Bills Receivable A/c}& & & 25,000\\ & \text{(Being bill sent for collection )}& & & \\ & \underset{–}{}& & & \\ \text{Mar 18}& \text{Vimal}\text{Dr}& & 25,000& \\ & \text{To Bill Sent for collection A/c}& & & 25,000\\ & \text{(Being Bill Disonoured on due date)}& & & \end{array}$$
In the Books of Vimal Journal Entries
When the bill was retained by Kamal till the date of its maturity
$$\begin{array}{ccccc}\text{Date}& \text{Particular}& \text{LF}& \text{Amt.(Dr)}& \text{Amt (Dr)}\\ \text{Mar 15}& \text{Purchase A/c}\text{Dr}& & 25,000& \\ & \text{To Kamal}& & & 25,000\\ & \text{(Being Goods purchased from Kamal)}& & & \\ & \underset{–}{}& & & \\ \text{Jan 15}& \text{Kamal}\text{Dr}& & 25,000& \\ & \text{To Bills Payable A/c}& & & 25,000\\ & \text{(Being Acceptance Given)}& & & \\ & \underset{–}{}& & & \\ \text{Mar 18}& \text{Bills Payable A/c}\text{Dr}& & 25,000& \\ & \text{To Kamal}& & & 25,000\\ & \text{(Being bill dishonoured)}& & & \\ & \underset{–}{}& & & \end{array}$$
When the bill was immediately discountd by Kamal at the rate of 6%
$$\begin{array}{ccccc}\text{Date}& \text{Particular}& \text{LF}& \text{Amt.(Dr)}& \text{Amt (Dr)}\\ \text{Mar 15}& \text{Purchase A/c}\text{Dr}& & 25,000& \\ & \text{To Kamal}& & & 25,000\\ & \text{(Being Goods purchased from Kamal)}& & & \\ & \underset{–}{}& & & \\ \text{Jan 15}& \text{Kamal}\text{Dr}& & 25,000& \\ & \text{To Bills Payable A/c}& & & 25,000\\ & \text{(Being Acceptance Given)}& & & \\ & \underset{–}{}& & & \\ \text{Mar 18}& \text{Bills Payable A/c}\text{Dr}& & 25,000& \\ & \text{To Kamal}& & & 25,000\\ & \text{(Being bill dishonoured)}& & & \\ & \underset{–}{}& & & \end{array}$$
When the bill was endorsed to sharad
$$\begin{array}{ccccc}\text{Date}& \text{Particular}& \text{LF}& \text{Amt.(Dr)}& \text{Amt (Dr)}\\ \text{Mar 15}& \text{Purchase A/c}\text{Dr}& & 25,000& \\ & \text{To Kamal}& & & 25,000\\ & \text{(Being Goods purchased from Kamal)}& & & \\ & \underset{–}{}& & & \\ \text{Jan 15}& \text{Kamal}\text{Dr}& & 25,000& \\ & \text{To Bills Payable A/c}& & & 25,000\\ & \text{(Being Acceptance Given)}& & & \\ & \underset{–}{}& & & \\ \text{Mar 18}& \text{Bills Payable A/c}\text{Dr}& & 25,000& \\ & \text{To Kamal}& & & 25,000\\ & \text{(Being bill dishonoured)}& & & \\ & \underset{–}{}& & & \end{array}$$

When the bill was sent for collection
$$\begin{array}{ccccc}\text{Date}& \text{Particular}& \text{LF}& \text{Amt.(Dr)}& \text{Amt (Dr)}\\ \text{Mar 15}& \text{Purchase A/c}\text{Dr}& & 25,000& \\ & \text{To Kamal}& & & 25,000\\ & \text{(Being Goods purchased from Kamal)}& & & \\ & \underset{–}{}& & & \\ \text{Jan 15}& \text{Kamal}\text{Dr}& & 25,000& \\ & \text{To Bills Payable A/c}& & & 25,000\\ & \text{(Being Acceptance Given)}& & & \\ & \underset{–}{}& & & \\ \text{Mar 18}& \text{Bills Payable A/c}\text{Dr}& & 25,000& \\ & \text{To Kamal}& & & 25,000\\ & \text{(Being bill dishonoured)}& & & \\ & \underset{–}{}& & & \end{array}$$