Question

On 1st July, 2016, A draws on B, who owed him ` 25,000, two bills, one for ` 15,000 for three months and

another for ` 10,000 for two months. B accepts these bills.

A endorses on 3rd July the first bill to his creditor C in full settlement of his account of ` 15,500 and discounts

the second bill on 4th July with his banker @ 12% p.a. The first bill is duly paid at maturity but the second bill

is dishonoured and ` 150 are paid as noting charges. On 5th Setember A draws and B accepts a third bill for

three months for ` 10,450 in lieu of the dishonoured bill. This bill is duly paid at maturity.

Give Journal Entries to record these transactions in the books of A ​

Answer 1

Answer:

On 1st July, 2016, A draws on B, who owed him ` 25,000, two bills, one for ` 15,000 for three months and

another for ` 10,000 for two months. B accepts these bills.

A endorses on 3rd July the first bill to his creditor C in full settlement of his account of ` 15,500 and discounts

the second bill on 4th July with his banker @ 12% p.a. The first bill is duly paid at maturity but the second bill

is dishonoured and ` 150 are paid as noting charges. On 5th Setember A draws and B accepts a third bill for

three months for ` 10,450 in lieu of the dishonoured bill. This bill is duly paid at maturity.

Give Journal Entries to record these transactions in the books of A

Explanation:

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