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Question -

On Jan 01, 2016 Rao sold goods ₹ 10,000 to Reddy. Half of the payment was made immediately and for the remaining half Rao drew a bill of exchange upon Reddy payable after 30 days. Reddy accepted the bill and returned it to Rao. On the due date Rao presented the bill to Reddy and received the payment. Journalise the above transactions in the books Rao and prepare of Rao’s account in the books of Reddy.



Answer -

Books of Rao

Journal 

Date

Particulars

L.F.

Debit

Amount

₹

Credit

Amount

₹

2016

01 Jan

Reddy

Dr.

10,000

To Sales A/c

10,000

(Goods tradedto Reddy)

01 Jan

Cash A/c

Dr.

5,000

To Reddy

5,000

(Cash received from Reddy)

01 Jan

Bills Receivable A/c

Dr.

5,000

To Reddy

5,000

(Bill received for 30 days accepted by Reddy)

03 Feb

Cash A/c

Dr.

5,000

To Bills Receivable A/c

5,000

(Reddy’s acceptance met on due date)

Books of Reddy

Rao’s Account

Dr.

Cr.

Date

Particulars

J.F.

Amount

₹

Date

Particulars

J.F.

Amount

₹

01 Jan

Cash

5,000

2016

01 Jan

Bills Receivable

5,000

01 Jan

Purchases

10,000

10,000

10,000

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