Question

What Journal entry will be passed in the books of drawer (X) and drawee (Y) at the time of dishonour of bill in the following cases:
(i) If bill of ₹ 50,000 was discounted from bank and noting charges paid by the bank was ₹ 600.
(ii) If B/R of ₹ 50,000 was endorsed in favour of Z. Noting charges paid by Z ₹ 600.
(iii) If B/R is returned with drawer and noting charges were ₹ 600.

Answer 1

X’s Journal
Date	Particulars		L.F.	Debit Amount (Rs)	Credit Amount (Rs)
(i)	Y	Dr.		50,600
	To Bank A/c				50,600
	(Bill dishonored)
(ii)	Y	Dr.		50,600
	To Z				50,600
	(Bill endorsed to Z, dishonored)
(iii)	Y	Dr.		50,600
	To Bills Receivable A/c				50,000
	To Cash A/c				600
	(Bill dishonored)

Y’s Journal
Date	Particulars		L.F.	Debit Amount (Rs)	Credit Amount (Rs)
(i)	Bills Payable A/c	Dr.		50,000
	Noting Charges A/c	Dr.		600
	To X				50,600
	(Bill dishonored)
(ii)	Bills Payable A/c	Dr.		50,000
	Noting Charges A/c	Dr.		600
	To X				50,600
	(Bill dishonored)
(iii)	Bills Payable A/c	Dr.		50,000
	Noting Charges A/c	Dr.		600
	To X				50,600
	(Bill dishonored)