Question

For the mutual accommodation of ‘X’ and ‘Y’ on 1
st April, 2016, ‘X’ drew a four months’
billon ‘Y’ for J4,000. ‘Y’ returned the bill after acceptance of the same date. ‘X’ discounts
the bill from his bankers @ 6% per annum and remit 50% of the proceeds to ‘Y’. On due
date ‘X’ is unable to send the amount due and therefore ‘Y’ draws a bill for J7,000,
which is duly accepted by ‘X’. ‘Y’ discounts the bill for J 6,600 and sends J1,300 to ‘X’.
Before the bill is due for payment ‘X’ becomes insolvent. Later 25 paise in a rupee received
from his estate.
Record Journal entries in the books of ‘X’.

Answer 1

Answer:

Explanation:

1april. Bills receivable a/c. Dr 4000

To y a/c 4000

. (Acceptance received from y for mutual accommodation

.