Illustration 27 (When the Drawee is Declared Insolvent). P accepted a bill for 40,000 drawn
him by Q on 1st May, 2017 for 3 months. This was for the amount which P owed to Q. de
the bill discounted at his bank for * 39,000. Just before the due date, P approached Q
renewal of the bill. Q agreed on the condition that 10,000 be paid immediately together wi
interest on the remaining amount @ 12% p.a. for 3 months and that for the remaining bala,
P should accept a new bill for 3 months. These arrangements were carried through
7th November, 2017, P became insolvent and his estate paid 40%.
Give Journal entries in the books of P and Q. Also, give P's Account in the books of Q.
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yes they will
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