Question

A sold goods to B worth rs 10000 and draws a bill for the same. B accepted the bill and returned to A. A endorsed the bill to C. C endorsed the bill to D. D endorsed the bill to B. Pass the journal entry in the books of A and B

Answer 1

Journal entries in the books of "A"

i)B A/c       Dr     10000

        To Sales A/c         10000

(Being sales made to B)

ii)Bills Receivable A/c    Dr  10000

         To B A/c                                10000

(Being bill of exchange drawn by A and accepted B)

iii)C A/c    Dr       10000

         To Bills Receivable A/c    10000

(Being bill endorsed to C,creditor)

Journal entries in the books of "B"

i)Purchases A/c    Dr     10000

        To  A A/c                      10000

(Being purchases made from A)

ii)A A/c   Dr    10000

      To Bills Payable A/c   10000

(Being bill drawn and accepted)

iii)Bills Payable A/c   Dr    10000

      To D A/c                               10000

(Being bill endorsed by D)

The entry for when C endorsed the bill to D will not be made in either of A or B A/c.