Question

For the goods sold tall drew a three months bill on thin for Rs 4,000/- on 1-3-2014. Thin
accepted the same and returned it to tall. After receiving the bill tall endorsed it to his creditor
short. Short discounted the bill in the bank at 8% per annum. On the due date the bill is
dishonoured. Pass the journal entries in the books of all parties to record the above transaction​

Answer 1

Explanation:

in the books of tall

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b/r a/c dr. 4000

to thin a/c 4000

short a/c dr. 4000

To b/r 4000

Thin a/c dr. 4000

To short a/c 4000

In the books of Thin

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Tall a/c dr. 4000

To b/p a/c 4000

b/p a/c dr. 4000

To tall a/c 4000

( bill were dishonoured)

In the books of short

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B/r a/c dr.4000

To tall a/c 4000

Bank a/c dr. 320

discount charges a/c dr. 80

To B/r a/c 400

Tall a/c dr. 4000

To Bank a/c 4000

(dishonoured bill)