Question

B owed ` 8,000 to A. On Ist January, 2011, A received from B ` 3,000 and

drew a bill on him at 3 months for the balance. On the same day, A endorsed

this bill to C in full settlement of a debt of ` 5,100. On the due date,

B became insolvent and paid only 60% of his debts in full settlement.

Give journal entries in the books of A and B.

Answer 1

book of A. BOOK OF B

B A/C DR. PUR. DR

TO SALES. TO A

B/R. DR. A. DR

TO. B. TO. BP

C A/C. DR . ------------

TO. B/R. -----------