Sandhu draws a bill of exchange on manohar for Rs.50,000 for 3 months on 1st January 2018 in full
settlement for an outstanding of Rs.51,000. On 1st Feb,2018 Sandhu discounts the bill with his bankers
@ 16% p.a. On the date of maturity, Manohar not being able to meet the bill, offers Sandhu Rs.20,000
and asks him to draw another bill for 3 months for the balance plus interest @ 18% p.a. Sandhu agrees
to the same. On due date of second bill, Manohar becomes bankrupt and only 30 paise in a rupee could
be received from his estate. Pass Journal entries in the books of Sandhu. Make necessary working
notes.
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Explanation:
calculation of Discount
50000x16/100×2/12 =1333
calculation of Interest
50000x18/100×3/12 = 2250
Attachments:
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