Question

On april 1, 2018 A sold goods to B for 50,000 . A drawn a bill on B for 3 months. B accepts immediately and returns to A . After one month A discounted a bill from bank @ 12% p.a. The bill is honoured on due date. Pass journal entries in the books of both parties

Answer 1

Answer:

Here , we have to prepare journal entries for these bill of exchange ;

In the books of A

• B 's a/c Dr. 50000

To Sales a/c 50000

( sold goods to B )

• Bill's Receivable a/c Dr. 50000

To B's ac. 50000

( Bill's Receivable received )

• Bank ac Dr 44000

Discount ac Dr. 6000

To Bill's Receivable ac 50000

( Bills discounted with bank )

__________________

In the books of B

• Purchases ac Dr. 50000

To A's ac 50000

( Purchased goods )

• A 's ac. Dr. 50000

To Bill's payable a/c 50000

( Bill's payable accepted )

• Bill's payable ac Dr. 50000

To bank ac 50000

( Bill's payable honoured )

_____________________