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Question -

Abdula sold goods to Tahir on Jan 17, 2017 for ₹ 18,000. He drew a bill of exchange for the same amount on Tahir for 45 days. On the same date Tahir accepted the bill and returned it to Abdulla. On the due date Abdulla presented the bill to Tahir which was dishonoured. Abdulla paid ₹ 40 as noting charges. Five days after the dishonour of his acceptance Tahir settled his debt by making a payment of ₹ 18,700 including interest and noting charges. Record the necessary journal entries in the books of Abdulla and Tahir. Also prepare Tahir’s account in the books of Abdulla and Abdulla’s account in the books of Tahir.



Answer -

 

Books of Abdula

Journal

Date

Particulars

L.F.

Debit ₹

Credit₹

2017

17 Jan

Tahir

Dr.

18,000

To Sales A/c

18,000

(Goods tradedto Tahir)

17 Jan

Bills Receivable A/c

Dr.

18,000

To Tahir

18,000

(Tahir’s acceptance received)

06 Mar

Tahir

Dr.

18,040

To Bills Receivable A/c

18,000

To Cash

40

(Tahir’s acceptance dishonoured and ₹ 40 paid as

noting charges)

06 Mar

Tahir

Dr.

660

To Interest A/c

660

(Interest charged from Tahir on account of bill

dishonoured)

12 Mar

Cash A/c

Dr.

18,700

To Tahir

18,700

(Tahir cleared his account by paying cash)

Ledger 

Tahir’s Account

Dr.

Cr.

Date

Particulars

J.F.

Amount ₹

Date

Particulars

J.F.

Amount ₹

2017

2017

17 Jan

Sales

18,000

17 Jan

Bills Receivable

18,000

06 Mar

Bills Receivable

18,000

11 Mar

Cash

18,700

06 Mar

Cash

40

06 Mar

Interest

660

36,700

36,700

 

Books of Tahir

Journal

Date

Particulars

L.F.

Debit ₹

Credit₹

2017

17 Jan

Purchases A/c

Dr.

18,000

To Abdula

18,000

(Goods purchased from Abdula)

17 Jan

Abdula

Dr.

18,000

To Bills Payable A/c

18,000

(Bill drawn by Abdula accepted, payable after 15 days)

06 Mar

Bills Payable A/c

Dr.

18,000

Noting Charges A/c

Dr.

40

To Abdula

18,040

(Abula’s bill dishonoured)

07 Mar

Interest A/c

Dr.

660

To Abdula

660

(Interest charged on account of bill dishonoured)

11 Mar

Abdula

Dr.

18,700

To Cash A/c

18,700

(Cash paid to Abdula)

Ledger

Abdula’sAccount

Dr.

Cr.

Date

Particulars

J.F.

Amount ₹

Date

Particulars

J.F.

Amount ₹

2017

2017

17 Jan

Bills Payable

18,000

17 Jan

Purchases

18,000

11 Mar

Cash

18,700

06 Mar

Bills Payable

18,000

06 Mar

Noting Charges

40

06 Mar

Interest

660

36,700

36,700

 

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