Question

Bills of exchange: Subhash ghai sold goods to prakash mehra for Rs.10,000 on Oct.1, 2014, and on Oct. 10, 2014 he received Rs. 4000 in cash and drew a bill of exchange of 3 months for the balance.

Answer 1

In the books of Subash Ghai
Journal entries

Oct 1
Prakash Mehra Account Dr 10,000
To Sales Account 10,000


Oct 10

Cash Account Dr. 4,000
Bills Receivable Account Dr. 7,000
To Prakash Mehra Account 10,000