Y owes X ₹ 4,000. On 1st January, 2017, Y accepts a 3 months bill for ₹ 3,900 in satisfaction of his full claim. On the same date, it was endorsed by X to Z in satisfaction of his claim of ₹ 3,980. The bill is dishonoured on the due date. Give the Journal entries in the books of X.

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Solution

Books of X

Journal

Date

Particulars

L.F.

Debit

Amount

Rs

Credit

Amount

Rs

2017

Jan.01

Bills Receivable A/c

Dr.

3,900

Discount Allowed A/c

Dr.

100

To Y

4,000

(Y’s acceptance received in full settlement of

amount due from him and allowed with discount)

Jan.01

Z

Dr.

3,980

To Bills Receivable A/c

3,900

To Discount Received A/c

80

(Y’s acceptance endorsed in favour of Z

and discount received)

Mar.04

Y

Dr.

4,000

Discount Received A/c Dr.

80

To Z

3,980

To Discount Allowed A/c

100

(Y’s acceptance was endorsed to Z,

now dishonoured)

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Books of X
Journal
Date	Particulars		L.F.	Debit Amount Rs	Credit Amount Rs
2017
Jan.01	Bills Receivable A/c	Dr.		3,900
	Discount Allowed A/c	Dr.		100
	To Y				4,000
	(Y’s acceptance received in full settlement of amount due from him and allowed with discount)

Jan.01	Z	Dr.		3,980
	To Bills Receivable A/c				3,900
	To Discount Received A/c				80
	(Y’s acceptance endorsed in favour of Z and discount received)

Mar.04	Y	Dr.		4,000
	Discount Received A/c Dr.			80
	To Z				3,980
	To Discount Allowed A/c				100
	(Y’s acceptance was endorsed to Z, now dishonoured)