18 On 14 October 2014. X sold goods to Y for 25,000 and drew two bills of exchange on him: the first for
210,000 for two months and second for 15,000 for 3 months. Y accepted and returned these bills to X.
Both the bills were sent to the bank for collection. In due course, X received the information from the
bank that the bill for 10,000 was duly met but other bill for 15,000 had been dishonoured. Noting
charges paid on the dishonour of the second bill were 100
Pass Journal entries in the books of X.
Answers
Explanation:
- X sold goods to Y for 25000.
- Y's Account Dr. 25000 To Sales Account. 25000
2. X drew two bills of Exchange on Y.
- Bills Receivable Account (1). dr 10000
Bills Receivable Account (2). dr 15000
To Y's Account. 25000
3. Both the bills were sent to bank for collection.
Bill sent for collection Account. dr. 25000
To Bills Receivable Account(1). 10000
To Bills Receivable Account (2). 15000
4. Bill of 10000 was duly met
Bank Account Dr. 10000
To bill sent for collection Account. 10000
5. Bill of 15000 had been dishonoured. Noting charges 100
Y's Account. Dr. 15100
To bill sent for collection Account.15000
To cash Account. 100
Note: In 4 th line of question....in place of 210000.....10000 is correct...( Refer line 9...10000 is given)