Question

B owed rs 5000 to a for which he accepted a bill on 12/2/2019 for three months. on the same due date the bill was sent for collection on due date the b was declared insolvent and a dividend of 25 paise in rupee could be recovered from his estate. give journal entries in the books of a and b.​

Answer 1

Explanation:

In books of A

Bills receivables account. dr 5000

To B. 5000

bill sent for collection. dr. 5000

To Bills receivable account. 5000

B. dr. 5000

To bills sent for collection a/c. 5000

cash account. dr. 1250

bad debt account dr 3750

To B. 5000

In books of B

A. dr. 5000

To bills payable account 5000

Bills payable account. dr 5000

To A. 5000

A. dr. 5000

To cash account. 1250

To deficiency account 3750