Question

of Exchange Discounted by the Drawer
Following transactions are given:
1.1.2076: Mandip purchased goods from Manish for Rs. 30,000.
1.1.2076 : Manish draws a bill on Mandip for three months for Rs 30,000. Mandip accepts the same and
returns it to Manish
1.2.2076 : Manish discounts the bill with the Bank 10%
Required
a journal entries in the books of Manish and Mandip if the bill is honoured.
b. Journal entries in the books of Manish and Mandip if the bill is dishonoured and a noting charge of Rs.
400 is incurred​

Answer 1

Explanation:

Republic Day is a national holiday in India. It honours the date on which the Constitution of India came into effect on 26 January 1950 replacing the Government of India Act as the governing document of India and thus, turning the nation into a newly formed republic.

Answer 2

Answer:

Required Journal Entries :

In The Books Of Manish ( Drawer ) :

• Mandip ac Dr. 30,000

To Sales ac 30,000

( Sale Goods to Mandip )

• Bill's Payable ac Dr 30,000

To Debtor's ac. 30,000

( Drew a bill )

• Bank ac Dr. 27000

Discount ac Dr. 3000

To Bill's R ac. 30,000

( Discounted bill with bank )

• a) Mandip ac Dr. 30,000

To Bank ac 30,000

( Discounted bill is dishonoured )

• b) Mandip ac Dr 400

To Bank ac 400

( Paid noting Charges )

In the Books Of Mandip ( Drawee ) :

• Purchases ac Dr. 30,00

To Manish ac

( Purchases Goods from Manish )

• Manish ac Dr. 30,000

To Bill's payable ac 30,000

( Accepted the bill )

• Bills Payable ac Dr. 30,000

Noting Charges ac Dr 30,000

To Manish ac 30,000

( Bill's dishonoured and paid noting Charges )

Working Note ;

Discount = 10%

Amount = 30,000

= 30,000 × 10 / 100

= 300000 / 100

= 3000

Note :

• Write dates on each transactions in journal

• Write amount correctly in both debit and credit sides of journal.

• There is no entry in books of Mandip ( Drawee ) for discounting the bills.