Question

Question 38.
Give the Journal entries for the following:
(a) B’s acceptance to us for ₹ 1,000 due this day, renewed at his request for 3 months with interest @ 6% p.a.
(b) Our bill to C. Chandra for ₹ 5,000 renewed for 2 months with interest @ 6% p.a.
(c) B’s acceptance of ₹ 3,000 is discharged on his paying us cash ₹ 1,000 and accepting a fresh bill for the balance with interest ₹ 100.

Answer 1

The correct journal entries are -

a) B's A/c Dr 1000

To Bills Receivable A/c 1000

B/s A/c Dr 15

To Interest A/c 15

Bills Receivable A/c Dr. 1015

To B's A/c 1015

b) Bills Payable A/c Dr 5000

To C Chandra  A/c 5000

Interest A/c Dr 50

To C Chandra A/c 50

C Chandra A/c 5050

To Bills payable A.c 5050

c) B's A.c Dr. 3000

To Bills receivable A.c 3000

Cash A/c Dr 1000

To B's A/c 1000