Question 6.
Dinesh received from Shridhar an acceptance for ₹ 3,000 on 1st September, 2016 at 3 months. Dinesh got the acceptance discounted at 9% p.a. from his bank. On the due date, Shridhar paid the required amount.
Give the Journal entries in the books of Dinesh and Shridhar.
Answers
The journal entries which are made in the books of D and S are shown below:
Explanation:
The journal entries which are to be recorded in the books of Shridhar (S) are as:
2016
September 1
Dinesh A/c.......................................Dr Rs3,000
Bills Payable A/c.........................Cr Rs3,000
Being the bill drawn by Shridhar, accepted
December 04
Bills Payable A/c.........................Dr Rs 3.000
Bank A/c......................................Cr Rs 3,000
Being the bill is discharged on its due date
The journal entries which are to be recorded in the books of Dinesh (D) are as:
2016
September 1
Bills Receivable A/c...................................Dr Rs3,000
Shridhar A/c................................................Cr Rs3,000
Being Shridhar acceptance is received
September 1
Bank A/c................................Dr Rs2,932
Discount Charges A/c...........Dr Rs 68
Bills Receivable A/c..........Cr Rs 3,000
Being bill is discounted with the bank
Working Note:
Discount charges = Amount of bill × Discount rate × Months
= Rs3,000 × 9% × 3 / 12 months
= Rs 68