Question

Paid by cheque rs 25000 to mehar and settled her dues of rs 26000

Answer 1

Mehar A/c Dr 26000

To Discount A/c 1000

To bank A/c 25000

(being paid to mehar as the full settlement )

Hope its useful..!!!

Answer 2

Given " Paid by cheque 25000 to Mehar and settled her dues of rs 26000" This transaction gives us a clue that Amount is due to Mehar..so She will be "Creditor" and her account is settled completely.even though amount paid is Less than amount owed...so Difference in amount will be discount..So 26000 - 25000 = 1000 will be Discount (recieved)

This transaction affects three accounts...Mehar a/c , Bank a/c and discount recieved a/cwhere Mehar account is a personal account, bank account is a real account, Discount recieved account is a nominal account

The three golden rules of accounting are

Personal account Debit the receiver, credit the giver

Real account - Debit what comes in, Credit what goes out

Nominal account - Debit all expenses and losses, Credit all incomes and gains

So basing on the above rules..Mehar being the receiver should be debited , discount recieved being income should be credited, money is going out of bank/ decreasing so bank should be credited..

So the Journal Entry will be -

Mehar a/c Dr. 26000

To Bank a/c. Dr. 25000

To Discount recieved a/c. 1000

(Being Mehar account settled by Cheque)