Ankut draw a bill on bhawana 60000 ankit endorse it to charu in settlement of 70000 at a discount of 2% and the balance in cash if the bill is dishonoured on the due date by what amount wil charu debit ankit
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Ankut draw a bill on bhawana 60000 ankit endorse it to charu in settlement of 70000 at a discount of 2% and the balance in cash if the bill is dishonoured on the due date by what amount wil charu debit ankit
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The amount would be 80,000
Explanation:
When Charu received the bill from Ankit in settlement of amount, the journal entry to be passed.
Cash A/c..............................Dr $8,600
Bills Receivable A/c..........Dr $80,000
Ankit A/c.........................Cr $86,800
Being cash and bill received from Ankit on settlement
The journal entry which is to be passed when the bill got dishonour on due date.
On dishonour
Ankit A/c...........................Dr $80,000
Bills Receivable A/c........Cr $80,000
Being the bill got dishonour
Working Note:
Discount = 70,000 × 2%
Discount = 1,400
So, the amount after settlement would be:
Amount after settlement = 70,000 - 1,400
Amount after settlement = 86,800
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