Accountancy, asked by amanjainfb, 1 year ago

A sold goods to B for Rs 20,000 on January 01 2010. On the same date A drew two bills, the first
bill of Rs 8,000 for one month and the second of Rs 12,000 for two months. B accepted and
returned them to A. A discounted the first bill with the bank at 12% p.a. and retained the second
bill till its maturity. The first bill was met on maturity. On Feb. 25, 2010, B requested A for
cancelling the second bill and to draw a new bill. A agreed on the condition that new bill will be
drawn for the same balance (i.e. Rs 12,000) plus Rs 200 as interest for two months. B accepted
the new bill. On the due date, B declared himself as insolvent and his official receiver paid 40
paise in a rupee to A. Pass the necessary Journal entries in the books of A and B

Answers

Answered by madeducators2

Journal Entries in the books of both the parties

Explanation:

In the Books of A

Journal:

1.1.10 B A/c Dr. Rs.20,000

To Sales A/c Rs.20,00,000

(Being goods sold to B on credit)

Bills Receivable A/c Dr. Rs.20,000

To B A/c Rs.20,000

(Being bill drawn upon B)

Bank A/c Dr. Rs.7040

Discount A/c Dr. Rs.960

To B/R A/c Rs.8000

(Being Bill 1 discounted)

25.2.10 B A/c Dr. Rs.12000

To B/R A/c Rs.12000

(Being bill dishonored)

Bills Receivable A/c Dr. Rs.12200

To Interest A/c Rs.200

To B A/c Rs.12000

(Being new bill drawn on B)

27.4.10 B A/c Dr. Rs.12200

To B/R A/c Rs.12200

(Being bill dishonored)

Bank A/c Dr. Rs.4880

Bad debts A/c Dr. Rs.7320

To B A/c Rs.12200

(Being 40% amount due recovered)

In the books of B

Journal:

1.1.10 Purchases A/c Dr. Rs.20000

To A A/c Rs.20000

(Being goods purchased on credit)

A A/c Dr. Rs.20000

To B/P A/c Rs.20000

(Being bill accepted)

3.2.10 B/P A/c Dr. Rs.8000

To Bank A/c Rs.8000

(Being bill payment made on maturity)

25.2.10 B/P A/c Dr. Rs.12000

To A A/c Rs.12000

(Being bill dishonored)

A A/c Dr. Rs.12000

Interest A/c Dr. Rs.200

To B/P A/c Rs.12200

(Being new bill accepted)

27.4.10 B/P A/c Dr. Rs.12200

To A A/c Rs.12200

(Being bill dishonored)

A A/c Dr. Rs.12200

To Bank A/c Rs.4880

To Deficiency A/c Rs.7320

(Being some amount paid on maturity)

Answered by llAngelicQueenll

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Journal Entries in the books of both the parties

Explanation:

In the Books of A

Journal:

1.1.10 B A/c Dr. Rs.20,000

To Sales A/c Rs.20,00,000

(Being goods sold to B on credit)

Bills Receivable A/c Dr. Rs.20,000

To B A/c Rs.20,000

(Being bill drawn upon B)

Bank A/c Dr. Rs.7040

Discount A/c Dr. Rs.960

To B/R A/c Rs.8000

(Being Bill 1 discounted)

25.2.10 B A/c Dr. Rs.12000

To B/R A/c Rs.12000

(Being bill dishonored)

Bills Receivable A/c Dr. Rs.12200

To Interest A/c Rs.200

To B A/c Rs.12000

(Being new bill drawn on B)

27.4.10 B A/c Dr. Rs.12200

To B/R A/c Rs.12200

(Being bill dishonored)

Bank A/c Dr. Rs.4880

Bad debts A/c Dr. Rs.7320

To B A/c Rs.12200

(Being 40% amount due recovered)

In the books of B

Journal:

1.1.10 Purchases A/c Dr. Rs.20000

To A A/c Rs.20000

(Being goods purchased on credit)

A A/c Dr. Rs.20000

To B/P A/c Rs.20000

(Being bill accepted)

3.2.10 B/P A/c Dr. Rs.8000

To Bank A/c Rs.8000

(Being bill payment made on maturity)

25.2.10 B/P A/c Dr. Rs.12000

To A A/c Rs.12000

(Being bill dishonored)

A A/c Dr. Rs.12000

Interest A/c Dr. Rs.200

To B/P A/c Rs.12200

(Being new bill accepted)

27.4.10 B/P A/c Dr. Rs.12200

To A A/c Rs.12200

(Being bill dishonored)

A A/c Dr. Rs.12200

To Bank A/c Rs.4880

To Deficiency A/c Rs.7320

(Being some amount paid on maturity)

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