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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.

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Solution

In the Books of Kamal Journal Entries
When the bill was retained by kamal till rhe date of its maturity

DateParticularLFAmt.(Dr)Amt (Dr)2011Jan 15Vimal DrTo Sales A/c25,000(Being goods sold to Vimal) –––––––––––––––––––––––Jan 15Bills Receivable A/c Dr25,000To Vimal25,000(Being Acceptance received) –––––––––––––––––––––––––Mar 18Vimal Dr25,000To Bills Receivable A/c25,000(Being Bill dishonoured )
When the bill was immediately discounted by Kamal at the rate of 6%
DateParticularLFAmt.(Dr)Amt (Dr)Jan 15Vimal Dr25,000To Sales A/c25,000(Being Goods sold to vimal) ––––––––––––––––––––––––––––––Jan 15Bills Receivable A/c Dr25,000To Vimal 25,000(Being Acceptance received) ––––––––––––––––––––––––––––––Jan 15Bank A/c Dr24,750Discound A/c Dr250To Bills Receivable A/c25,000(Being bill discounted at the rate of 6%) –––––––––––––––––––––––––––––––––Mar 18Vimal Dr25,000To Bank A/c25,000(Being Bill Disonoured on due date)
When the bill was endorsed to sharad
DateParticularLFAmt.(Dr)Amt (Dr)Jan 15Vimal Dr25,000To Sales A/c25,000(Being Goods sold to vimal) ––––––––––––––––––––––––––––––Jan 15Bills Receivable A/c Dr25,000To Vimal 25,000(Being Acceptance received) ––––––––––––––––––––––––––––––Jan 15Sharad Dr25,000To Bills Receivable A/c25,000(Being bill Endorsed to Sharad) –––––––––––––––––––––––––––––––––Mar 18Vimal Dr25,000To Sharad25,000(Being Bill Disonoured on due date)
When the bill was sent for collection
DateParticularLFAmt.(Dr)Amt (Dr)Jan 15Vimal Dr25,000To Sales A/c25,000(Being Goods sold to vimal) ––––––––––––––––––––––––––––––Jan 15Bills Receivable A/c Dr25,000To Vimal 25,000(Being Acceptance received) ––––––––––––––––––––––––––––––Jan 13Bill Sent for collection A/c Dr25,000To Bills Receivable A/c25,000(Being bill sent for collection ) –––––––––––––––––––––––––––––––––Mar 18Vimal Dr25,000To Bill Sent for collection A/c25,000(Being Bill Disonoured on due date)
In the Books of Vimal Journal Entries
When the bill was retained by Kamal till the date of its maturity

DateParticularLFAmt.(Dr)Amt (Dr)Mar 15Purchase A/c Dr25,000 To Kamal25,000(Being Goods purchased from Kamal) –––––––––––––––––––––––––Jan 15Kamal Dr25,000To Bills Payable A/c25,000(Being Acceptance Given) –––––––––––––––––––––––––Mar 18Bills Payable A/c Dr25,000To Kamal25,000(Being bill dishonoured) –––––––––––––––––––––––––––––
When the bill was immediately discountd by Kamal at the rate of 6%
DateParticularLFAmt.(Dr)Amt (Dr)Mar 15Purchase A/c Dr25,000 To Kamal25,000(Being Goods purchased from Kamal) –––––––––––––––––––––––––Jan 15Kamal Dr25,000To Bills Payable A/c25,000(Being Acceptance Given) –––––––––––––––––––––––––Mar 18Bills Payable A/c Dr25,000To Kamal25,000(Being bill dishonoured) –––––––––––––––––––––––––––––
When the bill was endorsed to sharad
DateParticularLFAmt.(Dr)Amt (Dr)Mar 15Purchase A/c Dr25,000 To Kamal25,000(Being Goods purchased from Kamal) –––––––––––––––––––––––––Jan 15Kamal Dr25,000To Bills Payable A/c25,000(Being Acceptance Given) –––––––––––––––––––––––––Mar 18Bills Payable A/c Dr25,000To Kamal25,000(Being bill dishonoured) –––––––––––––––––––––––––––––

When the bill was sent for collection
DateParticularLFAmt.(Dr)Amt (Dr)Mar 15Purchase A/c Dr25,000 To Kamal25,000(Being Goods purchased from Kamal) –––––––––––––––––––––––––Jan 15Kamal Dr25,000To Bills Payable A/c25,000(Being Acceptance Given) –––––––––––––––––––––––––Mar 18Bills Payable A/c Dr25,000To Kamal25,000(Being bill dishonoured) –––––––––––––––––––––––––––––


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