Question

Vishal sold goods for Rs. 7,000 to Manju on January 5, 2011 and drew upon her a bill of exchange payable after 2 months. Manju accepted Vishal's draft and handed over the same to Vishal after acceptance. Vishal immediately discounted the bill with his bank at the rate of 12% per annum. On the due date, Manju met her acceptance.

Journalise the above transactions in the books of Vishal and Manju.

Answer 1

In the Books of Vishal
Journal Entries

$\begin{array}{cccccc}\text{Date}& \text{Particulars}& & \text{L.F.}& \text{Amt. (Dr.)}& \text{Amt. (Cr.)}\\ \text{2011}& & & & & \\ \text{Jan 5}& \text{Manju's A/c}& \text{Dr.}& & \text{7,000}& \\ & \text{To Sales A/c}& & & & \text{7,000}\\ & \text{(Goods sold to Manju)}& & & & \\ & \underset{–}{}& & & & \\ \text{Jan 5}& \text{Bills Receivable A/c}& \text{Dr.}& & \text{7,000}& \\ & \text{To Manju's A/c}& & & & \text{7,000}\\ & \text{(Acceptance received)}& & & & \\ & \underset{–}{}& & & & \\ \text{Jan 5}& \text{Bank A/c}& \text{Dr.}& & \text{6,860}& \\ & \text{Discount A/c}& \text{Dr.}& & \text{140}& \\ & \text{To Bills Receivable A/c}& & & & \text{7,000}\\ & \text{(Bill discounted with the bank}& & & & \\ & \text{at the rate of 12}\%\text{per annum)}& & & & \end{array}$

Working Note:

Calculation of Interest $=7,000\times \frac{12}{100}\times \frac{2}{12}=Rs140$

In the Books of Manju
Journal Entries

$\begin{array}{cccccc}\text{Date}& \text{Particulars}& & \text{L.F.}& \text{Amt. (Dr)}& \text{Amt. (Cr)}\\ \text{2011}& & & & & \\ \text{Jan 5}& \text{Purchase A/c}& \text{Dr.}& & \text{7,000}& \\ & \text{To Vishal's A/c}& & & & \text{7,000}\\ & \text{(Goods purchased from Vishal)}& & & & \\ & \underset{–}{}& & & & \\ \text{Jan 5}& \text{Vishal's A/c}& \text{Dr.}& & \text{7,000}& \\ & \text{To Bills Payable A/c}& & & & \text{7,000}\\ & \text{(Acceptance given)}& & & & \\ & \underset{–}{}& & & & \\ \text{Mar 8}& \text{Bills Payable A/c}& \text{Dr.}& & \text{7,000}& \\ & \text{To Bank A/c}& & & & \text{7,000}\\ & \text{(Bills paid on maturity)}& & & & \end{array}$