Question

Jimmy sold goods to Johnny for Rs. 2000 on credit on 18th July, 2018 and received from him a bill of Rs. 2,100 which includes Rs. 100 for interest for credit period of sale. Give journal entries in the books of both the parties.
(i) When the bill is discounted immediately @ 6% p.a.
(ii) When the bill is discounted @ 9% p.a.​

Answer 1

Total cost of bill=2100

1. When customer get discount of 6%= 2100of 6%=2100×6/100 =21×6=126Rs
2. He got 126Rs benefit when he get 6% profit
3. 2100-126=1974Rs
4. If customer get 9% discount then=2100of 9%
5. 2100×9/100
6. 21×9=189Rs discount he get on 9%
7. 2100-189=1911Rs