Question

X draws upon Y a bill of ₹ 10,000 for three months on 1st July, 2016. The bill was duly accepted and returned by Y. On due date bill became dishonoured and noting charges paid under each of the following circumstances ₹ 75. Pass entries in the following cases:
(i) If drawer retains the bill with him till due date.
(ii) If drawer discounts the same with his Banker and noting charges paid by the Banker.
(iii) If drawer endorses the same to his creditor Z and noting charges paid by Z.
(iv) If drawer sends the bill for collection to his Banker and noting charges paid by the Banker.

Answer 1

Books of X Journal
Date	Particulars		L.F.	Debit Amount (Rs)	Credit Amount (Rs)
2016
July 01	Bills Receivable A/c	Dr.		10,000
	To Y				10,000
	(Y accepted the bill)
	Case (i): Bill retains till due date
Oct. 04	Y	Dr.		10,075
	To Bills Receivable A/c				10,000
	To Cash A/c				75
	(Bill dishonoured on due date and noting charges paid)
	Case (ii): Bill discounted with the bank
July 01	Bank A/c	Dr.		10,000
	To Bills Receivable A/c				10,000
	(Bill discounted with bank)
Oct. 04	Y	Dr.		10,075
	To Bank A/c				10,075
	(Bill dishonoured on due date and noting charges paid by bank)
	Case (iii): Bill endorsed to Z
July 01	Z	Dr.		10,000
	To Bills Receivable A/c				10,000
	(Bill endorsed in favour of Z)
Oct. 04	Y	Dr.		10,075
	To Z				10,075
	(Bill dishonoured on due date and noting charges paid by Z)
	Case (iv): Bill sent to bank for collection
July 01	Bill Sent for Collection A/c	Dr.		10,000
	To Bills Receivable A/c				10,000
	(Bill sent to bank for collection)
Oct. 04	Y	Dr.		10,075
	To Bill Sent for Collection A/c				10,000
	To Bank A/c				75
	(Bill dishonoured on due date and noting charges paid by bank)

Books of Y Journal
Date	Particulars		L.F.	Debit Amount (Rs)	Credit Amount (Rs)
2016
July 01	X	Dr.		10,000
	To Bills Payable A/c				10,000
	(Bill drawn by X, accepted)
	Same entry will be passed in both the cases
Oct. 04	Bills Payable A/c	Dr.		10,000
	Noting Charges A/c	Dr.		75
	To X				10,075
	(Bill dishonored on due date and noting charges paid)

Books of Z Journal
Date	Particulars		L.F.	Debit Amount (Rs)	Credit Amount (Rs)
2016
July 01	Bills Receivable A/c	Dr.		10,000
	To X				10,000
	(Bills receivable, received from X)
Oct. 04	X	Dr.		10,075
	To Bills Receivable A/c				10,000
	To Cash A/c				75
	(Bill dishonored on due date and noting charges paid)