Question

Vinod owed Rs.10,000 to Mohan. Mohan wrote a bill of exchange for Rs.10,000 on Vinod for three months, which was duly accepted by Vinod. Mohan discounted the bill with Bank at a discount of Rs.100. On maturity, Bill was dishonoured. Bank paid Rs.20 as noting charges. Pass journal entries in the books of Mohan.

Answer 1

Mohan's Journal

$\begin{array}{ccc}& & \\ \text{Bills Recivable A/c}\text{Dr}& 10,000& \\ \text{To Vinod}& & 10,000\\ \text{(Being acceptance received)}& & \\ \text{Bank A/c}\text{Dr.}& 9,900& \\ \text{Discount A/c}\text{Dr.}& 100& \\ \text{(Being bill discounted)}& & \\ \text{Vino}\text{Dr.}& 10,020& \\ \text{To Bank}& & 10,020\\ \text{(Being bill dishonoured and noting charges paid by bank)}& & \end{array}$