Question

Journal entry for bill of z discounted with the bank is dishonored

Answer 1

When bill was received from Z :

Bills Receivable A/C    Dr   Rs. xxx

   To Z A/C   Rs.xxx

(being bill receivable accepted from Z)

When Bill is discounted with Bank :

Bank A/C  Dr   Rs.xxx

Discount A/C Dr  xxx

    To Bills Receivable A/C  Rs.xxx

(being bills receivable from Z discounted with bank)

When Bill of Z  discounted with bank is dishonoured :

Z A/C   Dr  Rs.xxx

  To Bank A/C  Rs.xxx

(being bill of Z discounted with bank is dishonoured)