Question

​X made the following sales to Y:

Date	Amount (₹)
Jan. 01, 2017	20,000
Jan. 08, 2017	25,000
Jan. 10, 2017	10,000
Jan. 15, 2017	40,000

For all the sales X drew bills on Y payable after 60 days. Bill drawn on Jan. 01, 2017 was retained by X with him till its due date. The bill drawn on Jan. 08, 2017 was discounted by X from the bank at 9% p.a. The bill drawn on Jan. 10, 2017 was endorsed by X to his creditor Z in full settlement of ₹ 10,400. On March 12, 2017 X sent the bill drawn on Jan. 15, 2017 to his bank for collection. All the bills were met by Y on due dates.
Pass necessary journal entries in the books of X and Y and prepare Y' s account in the books of X and X's account in the books of Y.

Answer 1

Books of X Journal
Date	Particulars		L.F.	Debit Amount (Rs)	Credit Amount (Rs)
2017
Jan. 01	Y	Dr.		20,000
	To Sales A/c				20,000
	(Goods sold to Y)
Jan. 01	Bills Receivable A/c (1)	Dr.		20,000
	To Y				20,000
	(Y accepted the bill)
Jan. 08	Y	Dr.		25,000
	To Sales A/c				25,000
	(Goods sold to Y)
Jan. 08	Bills Receivable A/c (2)	Dr.		25,000
	To Y				25,000
	(Y accepted the bill)
Jan. 08	Bank A/c	Dr.		24,630
	Discounting Charges A/c	Dr.		370
	To Bills Receivable A/c (2)				25,000
	(Bill discounted with the bank @ 9% p.a. for 60 days)
Jan. 10	Y	Dr.		10,000
	To Sales A/c				10,000
	(Goods sold to Y)
Jan.10	Bills Receivable A/c (3)	Dr.		10,000
	To Y				10,000
	(Y accepted the bill)
Jan.10	Z	Dr.		10,400
	To Bills Receivable A/c (3)				10,000
	To Discount Received A/c				400
	(Bill endorsed in favour of Z)
Jan. 15	Y	Dr.		40,000
	To Sales A/c				40,000
	(Goods sold to Y)
Jan.15	Bills Receivable A/c (4)	Dr.		40,000
	To Y				40,000
	(Y accepted the bill)
Mar. 05	Cash A/c	Dr.		20,000
	To Bills Receivable A/c (1)				20,000
	(Bill honoured on maturity)
Mar. 12	Bill Sent for Collection A/c	Dr.		40,000
	To Bills Receivable A/c (4)				40,000
	(Bill sent to bank for collection)
Mar. 19	Bank A/c	Dr.		40,000
	To Bills for Collection A/c				40,000
	(Bill honoured on maturity)

Y’s Account
Dr.								Cr.
Date	Particulars	J.F.	Amount (Rs)	Date	Particulars	J.F.	Amount (Rs)
2017				2017
Jan. 01	Sales A/c		20,000	Jan. 01	Bills Receivable A/c (1)		20,000
Jan. 08	Sales A/c		25,000	Jan. 08	Bills Receivable A/c (2)		25,000
Jan. 10	Sales A/c		10,000	Jan. 10	Bills Receivable A/c (3)		10,000
Jan. 15	Sales A/c		40,000	Jan. 15	Bills Receivable A/c (4)		40,000
			95,000				95,000

Books of Y Journal
Date	Particulars		L.F.	Debit Amount (Rs)	Credit Amount (Rs)
2017
Jan. 01	Purchases A/c	Dr.		20,000
	To X				20,000
	(Goods purchased from X)
Jan. 01	X	Dr.		20,000
	To Bills Payable A/c (1)				20,000
	(Bill drawn by X, accepted)
Jan. 08	Purchases A/c	Dr.		25,000
	To X				25,000
	(Goods purchased from X)
Jan. 08	X	Dr.		20,000
	To Bills Payable A/c (2)				20,000
	(Bill drawn by X, accepted)
Jan. 10	Purchases A/c	Dr.		10,000
	To X				10,000
	(Goods purchased from X)
Jan.10	X	Dr.		10,000
	To Bills Payable A/c (3)				10,000
	(Bill drawn by X, accepted)
Jan. 15	Purchases A/c	Dr.		40,000
	To X				40,000
	(Goods purchased from X)
Jan. 15	X	Dr.		40,000
	To Bills Payable A/c (4)				40,000
	(Bill drawn by X, accepted)
Mar. 05	Bills Payable A/c (1)	Dr.		20,000
	To Cash A/c				20,000
	(Bill honoured on maturity)
Mar. 12	Bills Payable A/c (2)	Dr.		25,000
	To Cash A/c				25,000
	(Bill honoured on maturity)
Mar.14	Bills Payable A/c (3)	Dr.		10,000
	To Cash A/c				10,000
	(Bill honoured on maturity)
Mar.19	Bills Payable A/c (4)	Dr.		40,000
	To Cash A/c				40,000
	(Bill honoured on maturity)

X’s Account
Dr.									Cr.
Date		Particulars	J.F.	Amount (Rs)	Date	Particulars	J.F.	Amount (Rs)
2017					2017
Jan. 01		Bills Payable A/c (1)		20,000	Jan. 01	Purchases A/c		20,000
Jan. 08		Bills Payable A/c (2)		25,000	Jan. 08	Purchases A/c		25,000
Jan. 10		Bills Payable A/c (3)		10,000	Jan. 10	Purchases A/c		10,000
Jan. 15		Bills Payable A/c (4)		40,000	Jan. 15	Purchases A/c		40,000
				95,000				95,000

Working Note:

Calculation of Discounting Charges

$\mathrm{Discounting}\mathrm{Charges}=25,000\times \frac{9}{100}\times \frac{60}{365}=\mathrm{Rs}370$