Question

A sold goods to the value of Rs. 12,000 to B, taking a bill at 3 months, dated 1st July, 2009.On 4th August, A discounted the bill at 5% p.a. with his bankers. At maturity the bill wasrenewed and another bill was dishonoured, B paid Rs. 3,000 as noting charges and acceptedanother bill at 3 months for Rs. 9,000 at 6% interest, but before maturity he became insolvent,and ultimately paid his creditors 75 paise in the rupee.Make the entries in A’s Journal according the above transactions.

Answer 1

cash a/c Dr 12000
to sales a/c 12000

drawer a/c Dr
to b/p a/c


bank a/c Dr
to discount a/c
( being Bill discounted 5%)


b/p a/c Dr.
to drawer
( being Bill dishonour)

b/p a/c
noting charges a/c 3000
to drawer 3000
( being Bill dishonour and noted)

drawer a/c dr. 9000
to b/p a/c 9000