Rs. , . on the due date the bill is dishonoured, the bank paid Rs. as noting charges.
Ankit then pays Rs. , in cash and accepts a bill of exchange drawn on him for the balance together with Rs. as interest. This bill of exchange is for months and on the due date the bill is again dishonoured, Nikita paid Rs.
as noting charges. Draft the journal entries to be recorded in Nikita’s books. Solution Books of Nikita Apr. Bills Receivable A/c , To Ankit’s A/c , (Ankit’s promissory note received in settlement of his account) Apr.
Bank A/c , Discount A/c , (Ankit’s Promissory note discounted for Rs. , ) July Ankit A/c , , (The promissory note dishonoured by Ankit the amount of the bill and the noting charges recoverable from Ankit and payable to bank) July Cash A/c , To Ankit’s A/c , (The amount received from Ankit) July Ankit’s A/c To Interest A/c (Interest due from Ankit for the second bill) July Bills Receivable A/c , To Ankit’s A/c , (Ankit’s acceptance for monthsin settlement of amount due) Sept. Ankit’s A/c , , (The dishonour by Ankit of his acceptance) Sept. Ankit’s A/c To Cash A/c (Payment of noting charges, recoverable from Ankit) Illustraion .
On May Mohit sends his promissory note of Rs. for months to Rohit. Rohit gets it discounted with his bankers at percent per annum on May . On the due date the bill is dishonoured, the bank paying Rs.
as noting charges. Rohit agrees to accept Rs. , in cash (including Rs. for noting charges and interest) and another promissory note for Rs.
, at months. On the due date, Mohit approaches Rohit again and asks for renewal of the bill for a further period of months. Rohit agrees to the request, provided Mohit pays Rs. as interest in cash.
This last bill is paid on maturity. Draft journal entries in the books of Mohit and Rohit. Solution Books of Mohit May Rohit’s A/c ,