Question

Question 23.
A bill for ₹ 1,000 is drawn by A on B and accepted by the latter payable at the New Bank of India. Show what entries should be passed in the books of A under each of the following circumstances:
(a) If A retained the bill till the due date and then realized it on maturity.
(b) If A discounted it with his bankers for ₹ 950.
(c) If A endorsed it to his creditor C in full settlement of his debt.
(d) If A sent it to his bankers for collection.
Also, give the necessary entries in each of the cases if the bill is dishonoured.

Answer 1

Answer:

refer to the attachment

Answer 2

Journal entries in the Book's of A are -

Bills Receivable A/c 1000

To B's A/c 1000

( Being B's acceptance received)

Bank A/c 1000

To Bills Receivable A/c 1000

( Being B's acceptance honoured)

Bank A/c 950

Discount Charges A/c 50

To Bills Receivable A/c 1000

(Being bill acceptend, discounted with bank)

In the case of dishonour -

B's A/c 1000

To, Bills Receivable A/c 1000

( Being B's acceptance dishnoured)

B's A/c 1000

To Bank A/c

( Being B's acceptance dishnoured)