Question

A draws a bill on X for 1,20,000 for 3 months. A got the bill discounted at a rate of 12%. The amount of discount will be

Answer 1

Answer:

Explanation:

Discount = 3,600

1,20,000 × 12% × ³/₁₂ = 3,600

Bank a/c dr. 1,16,400

Discount a/c dr. 3,600

To Bills Receivable a/c cr. 1,20,000

Answer 2

The amount of discount will be "₹3,600"

• When the buyer is not able to make immediate payment at the time of purchase, the seller will draw a bill on the buyer for the amount so that he can pay the amount at a later scheduled date. The seller can discount the bill from the bank if he needs money early but a discount will be charged for the same.
• Amount of bill drawn by A on X = ₹1,20,000                                                        Bill is drawn for 3 months and is discounted by A from bank @12%.
• Amount of discount will be = Bill amount * discount rate * time period                                                                                                                  = 1,20,000 * 12/100 * 3/12                                                                                       = ₹3,600