Question

the parties.
6.
Somesh purchased goods to the value of 5,000 from Ramesh on 1st April, 2020. On the
same day, Ramesh drew and Somesh accepted a three month's bill for the amount. On 4th
May, 2020, Ramesh discounted the bill with his bank at 12% per annum. Somesh paid the
bill on the due date.
Give journal entries in the books of both the parties.​

Answer 1

Explanation:

In The Books of.. Ramesh

Journal

2020

Apr. 01.

Somesh A/c. Dr. 5000

To Sales A/c. 5000

( Being goods sold to him on credit )

Apr. 01.

Bills Receivable A/c. Dr. 5000

To Somesh A/c. 5000

( Being a bill was drawn upon him, was accepted )

Apr. 04.

Bank A/c. Dr. 4850

Discount on Bill A/c. Dr. 150

To Bills Receivable A/c. 5000

( Being the bill was discounted on bank @ 12% per anum)

In The Books of.. Somesh

Journal

2020

Apr. 01.

Purchase A/c. Dr. 5000

To Ramesh A/c. 5000

( Benig goods purchase on credit form him)

Apr. 01.

Ramesh A/c. Dr. 5000

To Bills Payable A/c. 5000

( Being a bill was drawn by him, was accepted )

July. 04.

Cash A/c. Dr. 5000

To Bills Payable A/c. 5000

( Being the bill was duely honoured on maturity date)