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Question -

Darshan sold goods for ₹ 40,000 to Varun on 8.1.2016 and drew upon him a bill of exchange payable after two months. Varun accepted the bill and returned the same to Darshan. On the due date the bill was met by Varun. Record the necessary Journal entries in the books of Darshan and Varun in the following circumstances.

· When the bill was retained by Darshan till the date of its maturity.
· When Darshan immediately discounted the bill @ 6% p.a. with his bank.
· When the bill was endorsed immediately by Darshan in favour of his creditor Suresh.
· When three days before its maturity, the bill was sent by Darshan to his bank for collection.



Answer -

(i)

Books of Darshan

Date

Particulars

L.F.

Debit 

Amount 

Credit 

Amount 

2016

08 Jan

Varun

Dr.

40,000

To Sales A/c

40,000

(Goods traded to Varun)

08 Jan

Bills Receivable A/c

Dr.

40,000

To Varun

40,000

(Bill of Exchange duly accepted and returned by Varun)

11 Mar

Cash A/c

Dr.

40,000

To Bills Receivable A/c

40,000

(Payment for B/R received for B/R)

Books of Varun

Date

Particulars

L.F

Debit ₹

Credit₹

2016

08 Jan

Purchases A/c

Dr.

40,000

To Darshan

40,000

(Goods purchased from Darshan)

08 Jan

Darshan

Dr.

40,000

To Bills Payable A/c

40,000

(Bill of two months accepted for Darshan)

11 Mar

Bills Payable A/c

Dr.

40,000

To Cash A/c

40,000

(Varun cleared his payment on the due date)

(ii)

Books of Darshan

Date

Particulars

L.F.

Debit 

Amount 

Credit 

Amount 

2016

08 Jan

Varun

Dr.

40,000

To Sales A/c

40,000

(Goods traded to Varun)

08 Jan

Bills Receivable A/c

Dr.

40,000

To Varun

40,000

(B/R received from Varun for two months)

08 Jan

Bank A/c

Dr.

39,600

Discount A/c

Dr.

400

To Bills Receivable A/c

40,000

(B/R discounted from bank @ 6 p.a.)

Books of Varun

Date

Particulars

L.F.

Debit ₹

Credit₹

2016

08 Jan

Purchases A/c

Dr.

40,000

To Darshan

40,000

(Goods purchased from Darshan)

08 Jan

Darshan

Dr.

40,000

To Bills Payable A/c

40,000

(Bill of two months accepted for Darshan)

11 Mar

Bills Payable A/c

Dr.

40,000

To Bank A/c

40,000

(Varun cleared his payment on the

due date)

(iii)

Books of Darshan

Date

Particulars

L.F.

Debit 

Amount 

Credit 

Amount 

2016

08 Jan

Varun

Dr.

40,000

To Sales A/c

40,000

(Goods traded to Varun)

08 Jan

Bills Receivable A/c

Dr.

40,000

To Varun A/c

40,000

(Varun’s approval received for two months)

08 Jan

Suresh A/c

Dr.

40,000

To Bills Receivable A/c

40,000

(Varun’s approval endorsed in favour of Suresh)

Books of Varun

Date

Particulars

L.F

Debit ₹

Credit₹

2016

08 Jan

Purchases A/c

Dr.

40,000

To Darshan

40,000

(Goods purchased from Darshan)

08 Jan

Darshan

Dr.

40,000

To Bills Payable A/c

40,000

(Bill drawn by Darshan accepted for two months)

11 Mar

Bills Payable A/c

Dr.

40,000

To Cash A/c

40,000

(Bill paid to the holder of bill)

(iv)

Books of Darshan

Date

Particulars

L.F.

Debit 

Amount 

Credit 

Amount 

2016

08 Jan

Varun A/c

Dr.

40,000

To Sales A/c

40,000

(Goods traded to Varun)

08 Jan

Bills Receivable A/c

Dr.

40,000

To Varun A/c

40,000

(Bill of Exchange duly accepted and returned by Varun)

08 Mar

Bill Sent for Collection A/c

Dr.

40,000

To Bills Receivable A/c

40,000

(Bill of Exchange sent for collection to bank)

11 Mar

Bank A/c

Dr.

40,000

To Bill Sent for Collection A/c

40,000

(Bill of Exchange matured and duly collected on date of maturity)

Books of Varun

Date

Particulars

L.F.

Debit 

Amount 

Credit 

Amount 

2016

08 Jan

Purchases A/c

Dr.

40,000

To Darshan

40,000

(Goods purchased from Darshan)

08 Jan

Darshan

Dr.

40,000

To Bills Payable A/c

40,000

(Bill of Exchange duly accepted and returned to Darshan)

11 Mar

Bills Payable A/c

Dr.

40,000

To Bank A/c

40,000

(Bill of Exchange matured and duly cleared on date of maturity)

 

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