Question

What is the journal entry for bill drawn on mr.X and accepted by him?

Answer 1

a. In case of honor

Cash/Bank A/c Dr. xx

To Bills Receivable A/c xx

(Being bill retained till maturity and payment received)

b. In case of dishonor

Drawee’s A/c Dr. xx

To Bills Receivable A/c xx

(Being bill retained till maturity and dishonored)

3. The bill is discounted with the bank

Bank A/c (amount actually received) Dr. xx

Discount A/c (amount of discount) Dr. xx

To Bills Receivable A/c xx

(Being bill discounted with the bank)