Question

X draws a bill on Y for Rs. 20,000 for 3 months on 01.01.2012. The bill is discounted with the banker at a charge of Rs. 100. At maturity the bill returned dishonored. In the books of X for dishonor the bank account will be credited by ______.

• A. Rs. 10,000
• B. Rs. 25,000
• C. Rs. 20,000
• D. Rs. 30,000

Answer 1

The correct option is C

Rs. 20,000

If a bill is discounted with the bank and is dishonoured, the journal entry will be:

Y's A/c Dr.	20,000
To Bank A/c	20,000