On Jan. 01, 2017 Harsh accepted a months bill for Rs. 10,000 drawn
on him by tanu for latter’s benefit. Tanu discounted the bill on same
day @ 8
p.a On the due date tanu sent a cheque to Harsh for honour
the bill. Harsh duly honoured his acceptance.
Record the journal entries in the Books of Tanu and Harsh.
Answers
The journal entries in the books of Harsh (H) and Tanu (T) are shown below:
Explanation:
The journal entries in the books of T are as:
2017
Jan 1
Bills Receivable A/c...........................Dr Rs10,000
To Harsh A/c.....................................Cr Rs 10,000
Being Harsh acceptance is received
Jan 1
Bank A/c.......................................Dr Rs 9,933
Discount Charges A/c...............Dr Rs 67
To Bills Receivable A/c.............Cr Rs 10,000
Being bill discounted at 8% for one month
Feb 4
Harsh A/c...........................Dr Rs 10,000
To Bank A/c.....................Cr Rs 10,000
Being payment made to Harsh
The journal entries in the books of H are as:
2017
Jan 1
Tanu A/c....................................Dr Rs 10,000
To Bills Payable A/c............Cr Rs 10,000
Being bill drawn by Tanu
Feb 4
Bank A/c..............................Dr Rs 10,000
To Tanu A/c........................Cr Rs 10,000
Being cheque received from Tanu
Feb 4
Bills Payable A/c.......................Dr Rs 10,000
To Bank A/c..............................Cr Rs 10,000
Being bill drawn through Tanu met on due date
Working Note:
Discount = Bill amount × Rate × Number of months / 12
=Rs 10,000 × 8% × 1/ 12
= Rs 66.66 or Rs 67
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