Viaml purchased goods Rs.25,000 from Kamal on Jan 15, 2016 and
accepted a bill of exchange drawn upon him by Kamal payable after
two months. On the date of the maturity the bill was duly presented for
payment. Vimal dishonoured the bill.
record the necessary journal entries in the books of Kamal and Vimal
when.
• The bill was retained by Kamal till the date of its maturity.
• The bill was immediately discounted by Kamal with his bank @ 6% p.a.
• The bill was endorsed by Kamal in favour of his creditor Sharad.
• Five days before its maturity the bill was sent by Kamal to his bank
for collection.
Answers
The correct journal entries are -
• The bill was retained by Kamal till the date of its maturity.
1) Vimal Dr. 25,000
To Sales A/c 25,000
(Goods sold to Vimal)
2) Bills Receivable A/c Dr. 25,000
To Vimal 25,000
(Vimal's acceptance received)
3) Vimal Dr. 25,000
To Bills Receivable A/c 25,000
(Vimal acceptance dishonoured)
• The bill was immediately discounted by Kamal with his bank @ 6% p.a.
1) Vimal Dr. 25,000
To Sales A/c 25,000
(Goods sold to Vimal)
2) Bills Receivable A/c Dr. 25,000
To Vimal 25,000
(Vimal's acceptance received)
3) Bank A/c Dr. 24,750
Discount A/c Dr. 250
To Bills Receivable A/c 25,000
(Vimal's acceptance discounted at 6% p.a. with bank)
• The bill was endorsed by Kamal in favour of his creditor Sharad.
1) Sharad Dr. 25,000
To Bills Receivable A/c 25,000
(Vimal's acceptance endorsed to Sharad)
2) Vimal Dr. 25,000
To Sharad 25,000
(Vimal's acceptance endorsed to Kamal dishonoured)
• Five days before its maturity the bill was sent by Kamal to his bank
for collection.
1) Bill Sent for Collection A/c Dr. 25,000
To Bills Receivable A/c 25,000
(Vimal's acceptance sent to bank for collection)
2) Vimal Dr. 25,000
To Bill Sent for Collection 25,000
(Vimal's acceptance dishonoured)