Question 11.
Mohan Singh draws a bill on Jagat for ₹ 1,000 payable 2 months after date. Immediately after its acceptance, Mohan Singh sends the bill to his bank for collection. On due date, bank gets the payment. Make the entries in the books of all the parties.
Answers
The journal entries in the books of the parties are shown below:
Explanation:
The journal entries in the books of Mohan (M) are as:
Bill Receivable A/c..........................Dr Rs 1,000
To Jagat A/c.....................................Cr Rs 1,000
Being bill acceptance received from Jagat.
Bills sent for collection A/c.................Dr Rs 1,000
To Bills Receivable A/c....................Cr Rs 1,000
Being BR sent to bank for collection
Bank A/c.....................................................Dr Rs 1,000
To Bills sent for collection A/c.................Cr Rs 1,000
Being payment received by bank
The journal entries in the books of Jagat (J) are as:
Mohan Singh A/c............................Dr Rs 1,000
To Bills Receivable A/c.............Cr Rs 1,000
Being bill drawn by Mohan accepted
Bills Payable A/c..........................Dr Rs 1,000
To Bank A/c............................Cr Rs 1,000
Being payment made