Question

5. On 1st January, 2019, X sold goods of 20,000 to Y and drew a bill on Y at three months
for the amount. Y accepted the bill. The bill is met on maturity. Pass the necessary Journal
entries in the books of X and Y, if X discounted the bill @ 12% p.a. from bank on 4th January.
Hint: Discounting charges = 600.]
for * 3.000 on 1st September 2018 of​

Answer 1

Journal Entries in the books of X and Y

Explanation:

                                          X's Journal A/c

Jan 1, 2019:  Y A/c                                 ...Dr. 20,000

                             To Sales A/c                                20,000

__________________________________________________________

Jan 1, 2019:  Bill Receivable A/c           ...Dr. 20,000

                             To Y A/c                                       20,000

__________________________________________________________

Jan 4, 2019:  Bank A/c                                   ...Dr. 19,400

                      Discounting Charges A/c        ...Dr. 600

                                To Bill Receivable A/c                      20,000

__________________________________________________________

Working Notes: Discounting Charges = 20,000 × $\frac{12}{100}$ × $\frac{3}{12}$

                                                               = Rs. 600

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                                                      Y's Journal A/c

Jan 1, 2019:  Purchases A/c                      ...Dr. 20,000

                               To X A/c                                          20,000

________________________________________________________

Jan 1, 2019:  X A/c                                   ...Dr.  20,000

                           To Bill Payables A/c                        20,000

________________________________________________________

April 4, 2019:  Bill Payables A/c             ...Dr. 20,000

                              To Bank A/c                                20,000

________________________________________________________