Manish sold goods to Sachin on 3rd June, 2021 for Rs30,000. Manish drew a bill for 3 months on Sachin and he accepted it. On 4th July Manish discounted the bill at 6% p.a. from his bank. On the due date, bill was dishonoured and bank paid Rs200 as noting charges. Give Journal Entries in books of Manish and Sachin.
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Answer:
Solution
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In the Books of Vishal
Journal Entries
Date Particulars LF Amt.(Dr) Amt.(Cr)
2011
Jan 5 Manju Dr
To Sales A/c
(Being goods sold to Manju)
7,000 7,000
Jan 5 Bills Receivable A/c Dr
To Manju
(Being acceptance received)
7,000 7,000
Jan 5 Bank A/c Dr
Discount A/c Dr
To Bills Receivable A/c
(Being Bill discounted with the bank at the rate of 12% per annum)
6,860
140
7,000
Working Note
Calculation of Interest=7,000×
100
12
×
12
2
=Rs. 140
In the Books of Manju
Journal Entries
Date Particulars LF Amt.(Dr) Amt.(Cr)
2011
Jan 5 Purchase A/c Dr
To Vishal
(Being goods purchased from Vishal)
7,000 7,000
Jan 1 Vishal Dr
To Bills Payable A/c
(Being acceptance given)
7,000 7,000
Mar 8 Bills Payable A/c Dr
To Bank A/c
(Being bills payable paid on maturity)
7,000 7,000
Explanation: