On 1st January, 2014 Vinod drew and Pramod accepted a bill at three months for `2,000. On 4th January, 2014 Vinod discounted the bill at his bank at 15% p.a. and remitted half the proceeds to Pramod. On 1 February, 2014 Pramod drew and Vinod accepted a bill at four months for `1,500. On 4th February, 2014 Pramod discounted the bill at 15% p.a. with his bank and remitted half the proceeds to Vinod. They both agreed to share the discount equally. At maturity Vinod met his acceptance, but Pramod dishonoured his and Vinod had to pay the bill. Vinod drew and Pramod accepted a new bill at three months for the original bill plus interest at 18% p.a. On 1st July, 2014 Pramod became insolvent and only 50 paise in the rupee was received from him. Record the above transactions in Vinod's Journal
Answers
This is the suggested answer for the above que
Explanation:
In the books of Vinod
Date Particulars Debit Credit
2014
Jan 1 Bills Receivable a/c dr 2000
To Pramod a/c 2000
(Being bill accepted for three months)
Jan 4 Bank a/c dr 1925
Discount a/c dr 75
To Bills Receivable a/c 2000
(Being bill discount at 15%)
Jan 4 Pramod a/c dr 1000
To Bank a/c 962.5
To Discount a/c 37.5
(Being half of the bill remitted)
Feb 4 Pramod a/c dr 1500
To bills payable a/c 1500
(Being bill accepted by Vinod)
Feb 4 Bills Payable a/c dr 1500
To Bank a/c 1425
To Discount a/c 75
(Being bill discounted)
Mar 4 BAnk a/c dr
May 4 Bank a/c dr 1500
To Bills Payable a/c 1500
(Being bill is dishonored)