in favour of his creditor Kapil for settling a debt of Rs. , . The new bill was duly met by Narain on maturity. Record the necessary journal entries in the books of Sachin and Narain.
Solution Books of Sachin Jan. Narain A/c , To Sales A/c , (Sold goods to Narain) Jan. Bill’s Receivable A/c , To Narain’s A/c , (Received Bunty’s acceptance) Jan. , Discount A/c To Bill receivable A/c , (Narains’ acceptance discounted with bank) Apr.
Narain’s A/c , , To Interest A/c (Narain’s acceptance cancelled) Apr. , Bills Receivavble A/c To Narain A/c , (Received cash from Narain and a new acceptance for the balace) Apr. Kapil A/c , To Bill Receivable A/c To Discount Received A/c (Narain’s acceptance endorsed in favour of kapil and he allowed discount) Books of Narain Jan. Purchases A/c , To Sachin A/c , (Purchased goods from sachin) Jan.
Sachin A/c , To Bills Payable A/c , (Accepted Sachin’s draft) Jan. Bill Payable A/c , Interest A/c To Sachin A/c , (Cancelled old bill & Sachin charged interest) Apr. Sachin’s A/c , , To Bill Payable A/c (Paid Sachin and accepted a new draft for the balance) Apr. Bills Receivavble A/c (Met new acceptance on Maturity) Illustration .
Ashok sold goods Rs. , to Bishan on October , and drew three bills for Rs. , , Rs. , & Rs.
, payable after two, three, and four months respectively. The first bill was kept by Ashok with him till maturity. He endorsed the second bill in favour of his creditor Chetan. The third bill was discounted on December , at % p.a.
The first and second bills were duly met on maturity but the third bill was dishonoured and the bank paid Rs. as noting charges. On March , Bishan paid Rs. , and noting charges in cash and accepted a new bill at two months after date for the balance plus interest Rs.
. The new bill was met on maturity by Bishan. You are required to give the journal entries in the books of