days of grace. 3) Mr. Q accepted a bill for 10,000 drawn on him by Mr. P on 1st August, 2020 for 3 months. This was for the amount which Q owed to P. On the same date Mr. P got the bill discounted at his bank for 9,800. On the due date, Q approached P for renewal of the bill. Mr. P agreed on condition that 32.000 be paid immediately along with interest on the remaining amount at 12% p.a. for 3 months and that for the remaining balance Q should accept a new bill for 3 months. These arrangements were carried through. On 31st December, 2020, Q became insolvent and his estate paid 40% (10 Marks) Prepare Journal Entries in the books of Mr. P an Inonmn and Eynonditure Account for the year ended 31st December .
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Mr. Q accepted a bill for 10,000 drawn on him by Mr. P on 1st August, 2020 for 3 months. This was for the amount which Q owed to P. On the same date Mr. P got the bill discounted at his bank for 9,800. On the due date, Q approached P for renewal of the bill. Mr. P agreed on condition that 32.000 be paid immediately along with interest on the remaining amount at 12% p.a. for 3 months and that for the remaining balance Q should accept a new bill for 3 months. These arrangements were carried through. On 31st December, 2020, Q became insolvent and his estate paid 40% (10 Marks) Prepare Journal Entries in the books of Mr. P an Inonmn and Eynonditure Account for the year
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