Question

Question 37.
‘B’ being unable to meet his acceptance for ₹ 2,000 due on 15th June, approaches the Drawer ‘A’ (who is in possession of the bill) on 30th June, with the request to receive ₹ 800 in cash and draw on him for the balance plus ₹ 15 for interest at 3 months date and cancel the old bill for ₹ 2,000. A agrees to this. Pass the entries in the books of A and B.

Answer 1

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Answer 2

The correct journal entries are -

In the Books of A

Jun 15 - B's A/c 2000

To Bills receivable A/c 2000

( Being B's acceptance dishonoured)

Jun 30 - Cash A/c 800

To B's A/c 800

( Being cash received from B )

Jun 30 - B's A/c 15

To Interest A/c 15

( Being interest due )

Jun 30 - Bills Receivable A/c 1215

To B's A/c 1215

( Being Bills accepted with interest)

In the Books of B

Jun 15 - Bills Payable A/c 2000

To A's A/c 2000

( Being bill drawn by A dishonoured)

Jun 30 - A's A/c 800

To Cash A/c 800

( Being A paid cash )

Jun 30 - Interest A/c A/c 15

To A's A/c 15

( Being interest due to A )

Jun 30 - A's A/c 1215

To Bills payable A/c 1215

( Being bill drawn with interest for balance amount )