Question

On 1st January, RAM drew a bill for rs 5000 for 4 month on Basant who accepted the bill. On 4th January Ram discounts the bill with his banker at 6% per annum. Vasant is unable to meet the bill on the due date and the bill is dishonoured. Pass journal entries in the books of Ram and Basant

Answer 1

Answer:

In the books of Ram:-

1/01 Bills Receivable A/c      Dr   5000

         To Basant A/c                   5000

4/01 Bank A/c       Dr   4700

       Discount A/c  Dr   300

             To Bills Receivable A/c     5000

Basant A/c   Dr   5000

        To Bank A/c     5000

(Being bill dishonoured)

In the books of Basant:-

1/01  Ram A/c   Dr  5000

            To Bills Payable A/c      5000

Bills Payable A/c   Dr   5000

          To Ram A/c              5000

(Being bill is dishonoured)