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Chapter 8 Bills of Exchange Solutions

Question - 31 : -
Narayanan purchased goods for ₹ 25,000 from Ravindran on Feb. 01, 2016. Ravindran drew upon Narayanan a bill of exchange for the same amount payable after 30 days. On the due date Narayanan dishonoured his acceptance. Pass the necessary journal entries in the books of Ravindran and Narayanan in following cases:
When the bill was retained by Ravindran with him till the date of its maturity.
When the bill was discounted by Ravindran immediately with his bank @ 6% p.a.
When the bill was endorsed to his creditor Ganeshan.
When the bill was sent by Ravindran to his bank for collection a few days before it maturity.

Answer - 31 : -

(i): When the bill was retained by Ravindran with him till the date of itsmaturity

Books of Ravindran

Journal

Date

Particulars

L.F.

Debit ₹

Credit₹

2016

01 Feb

Narayanan

Dr.

25,000

To Sales A/c

25,000

(Goods tradedto Narayanan)

01 Feb

Bills Receivable A/c

Dr.

25,000

To Narayanan

25,000

(Narayanan’s acceptance received for 30 days)

05 Mar

Narayanan

Dr.

25,000

To Bills Receivable A/c

25,000

(Narayanan failed to meet his

acceptance and bill dishonoured)

Books of Narayanan

Journal

Date

Particulars

L.F.

Debit ₹

Credit₹

2016

01 Feb

Purchases A/c

Dr.

25,000

To Ravindran

25,000

(Goods purchased from Ravindran)

01 Feb

Ravindran

Dr.

25,000

To Bills Payable A/c

25,000

(Ravindran’s bill accepted)

05 Mar

Bills Payable A/c

Dr.

25,000

To Ravindran A/c

25,000

(Bill dishonoured on maturity)

(ii): When the bill was discounted by Ravindran immediately with his bank @ 6%p.a.

Books of Ravindran

Journal

Date

Particulars

L.F.

Debit ₹

Credit₹

2016

01 Feb

Narayanan

Dr.

25,000

To Sales A/c

25,000

(Goods tradedto Narayanan)

01 Feb

Bills Receivable A/c

Dr.

25,000

To Narayanan

25,000

(Narayanan’s acceptance received)

01 Feb

Bank A/c

Dr.

24,875

Discount A/c

Dr.

125

To Bills Receivable A/c

25,000

(Narayanan’s acceptance got discounted with

bank @ 6% p.a.)

05 Mar

Narayanan

25,000

To Bank A/c

25,000

(Narayanan’s acceptance dishonoured)

Books of Narayanan

Journal

Date

Particulars

L.F.

Debit ₹

Credit₹

2016

01 Feb

Purchases A/c

Dr.

25,000

To Ravindran

25,000

(Goods purchased from Raivnderan)

01 Feb

Ravindran

Dr.

25,000

To Bills Payable A/c

25,000

(Ravindran’s bill accepted)

05 Mar

Bills Payable A/c

Dr.

25,000

To Ravindran

25,000

(Bill dishonoured on maturity)

(iii): When the bill was endorsed to his creditor Ganeshan

Books of Ravindran

Journal

Date

Particulars

L.F.

Debit ₹

Credit₹

2016

01 Feb

Narayanan

Dr.

25,000

To Sales A/c

25,000

(Goods tradedto Narayanan)

01 Feb

Bills Receivable A/c

Dr.

25,000

To Narayanan

25,000

(Narayanan’s acceptance received)

01 Feb

Ganeshan

Dr.

25,000

To Bills Receivable A/c

25,000

(Narayanan’s acceptance endorsed in favour

of Ganeshan)

05 Mar

Narayanan

Dr.

To Ganeshan A/c

25,000

(Narayanan’s acceptance dishonoured)

Books of Narayanan

Journal

Date

Particulars

L.F.

Debit ₹

Credit₹

2016

01 Feb

Purchases A/c

Dr.

25,000

To Ravindran

25,000

(Goods purchased from Ravindran)

01 Feb

Ravindran

Dr.

25,000

To Bills Payable A/c

25,000

(Ravindran’s bill accepted)

05 Mar

Bills Payable A/c

Dr.

25,000

To Ravindran

25,000

(Ravindran’s bill dishonoured on due date)

(iv): Whenthe bill was sent by Ravindran to his bank for collection a few days before itmaturity

Books of Ravindran

Journal

Date

Particulars

L.F.

Debit ₹

Credit₹

2016

01 Feb

Narayanan

Dr.

25,000

To Sales A/c

25,000

(Goods tradedto Narayanan)

01 Feb

Bills Receivable A/c

Dr.

25,000

To Narayanan

25,000

(Narayanan’s acceptance received)

01 Feb

Bill Sent for Collection A/c

Dr.

25,000

To Bills Receivable A/c

25,000

(Bill sent to bank for collection)

05 Mar

Narayanan

Dr.

25,000

To Bill Sent for Collection A/c

25,000

(Bill got dishonoured)

Books of Narayanan

Journal

Date

Particulars

L.F.

Debit ₹

Credit₹

2016

01 Feb

Purchases A/c

Dr.

25,000

To Ravindran

25,000

(Bought goods from Ravindran)

01 Feb

Ravindran

Dr.

25,000

To Bills Payable A/c

25,000

(Ravindran’s bill accepted)

05 Mar

Bills Payable A/c

Dr.

25,000

To Ravindran

25,000

(Ravindran’s bill dishonoured)

 

Question - 32 : - Ravi sold goods for ₹ 40,000 to Sudershan on Feb 13, 2016. He drew four bills of exchange upon Sudershan. The first bill was for ₹ 5,000 payable after one month. The second bill was for ₹ 10,000 payable after 40 days; the third bill was for ₹ 12,000 payable after three months and fourth bill was for the balance amount payable after 19 days. Sudershan accepted all the bills and returned the same to Ravi. Ravi discounted the first bill with his bank at 6% p.a. He endorsed the second bill to his creditor Mustaq for the full settlement of a debt of ₹ 10,200. The third bill was kept by Ravi with him till the date of maturity. Five days before the maturity of the fourth bill, Ravi sent the bill to his bank for collection. All the four bills were dishounoured by Sudarshan on maturity. Sudershan settled Ravi’s claim in cash three days after the dishonour of each bill along with interest @ 12% p.a. for the terms of the bills. You are requested to record the necessary journal entries in the books to Ravi, Sudershan, Mustaq and bank for the above transaction. Also prepare Sudershan’s account and Mustaq’s account in the books of Ravi.

Answer - 32 : -

Books of Ravi

Journal

Date

Particulars

L.F.

Debit

Credit₹

2016

13 Feb

Sudershan

Dr.

40,000

To Sales A/c

40,000

(Goods tradedto Sudershan)

13 Feb

Bills Receivable A/c

Dr.

40,000

To Sudershan

40,000

(Four bills from Sudershan received: the first for ₹

5,000, the second bill for ₹ 10,000, the third bill for

₹ 12,000 and the fourth bill for ₹ 13)

13 Feb

Bank A/c

Dr.

4,975

Discount A/c

Dr.

25

To Bills Receivable A/c

5,000

(The first bill discounted with bank at 6% p.a.)

13 Feb

Mustaq

Dr.

10,200

To Bills Receivable A/c

10,000

To Discount Received A/c

200

(The second bill endorsed to Mustaq in full settlement

of amount due to him)

03 Mar

Bill Sent for Collection A/c

Dr.

13,000

To Bills Receivable A/c

13,000

(The fourth bill sent to bank for collection)

07 Mar

Sudershan

Dr.

13,000

To Bill Sent for Collection A/c

13,000

(The fourth bill dishonoured on due date)

07 Mar

Sudershan

Dr.

81

To Interest A/c

81

(Interest due on the fourth bill ₹ 13,000 for 19

days at 12% p.a,)

10 Mar

Cash A/c

Dr.

13,081

To Sudershan

13,081

(Cash received from Sudershan)

16 Mar

Sudershan

Dr.

5,000

To Bank A/c

5,000

(The first bill dishonoured)

16 Mar

Sudershan

Dr.

50

To Interest A/c

50

(Interest due on amount ₹ 5,000 at 12%

for one month)

19 Mar

Cash A/c

Dr.

5,050

To Sudershan A/c

5,050

(Sudershan paid the amount due on account

dishonoured of the first bill plus interest)

28 Mar

Sudershan

Dr.

10,000

Discount Received A/c

Dr.

200

To Mustaq

10,200

(The second bill dishonoured, which had endorsed

in favour of Mustaq)

28 Mar

Sudershan

Dr.

132

To Interest A/c

132

(Interest charged at 12% on the amount due on account

of dishonour of the second bill ₹ 10,000)

01 Apr

Cash A/c

Dr.

10,132

To Sudershan A/c

10,132

(Received cash from Sudershan for the second bill

along with interest)

May16

Sudershan

Dr.

12,000

To Bills Receivable A/c

12,000

(The third bill dishonoured on due date)

May16

Sudershan

Dr.

360

To Interest A/c

360

(Interest at 12% for 3 months charged on the amount due

on account of dishonour the third bill ₹ 12,000)

May19

Cash A/c

Dr.

12,360

To Sudershan

12,360

(Cash received from Sudershan for the third bill along with interest 12% p.a.)

Ledger

Sudershan’s Account

Dr.

Cr.

Date

Particulars

J.F.

Amount ₹

Date

Particulars

J.F.

Amount ₹

2016

2016

13 Feb

Sales

40,000

13 Feb

Bills Receivable

40,000

07 Mar

Bill sent for Collection

13,000

10 Mar

Cash

13,081

07 Mar

Interest

81

19 Mar

Cash

5,050

16 Mar

Bank

5,000

01 Apr

Cash

10,132

16 Mar

Interest

50

May19

Cash

12,360

28 Mar

Mustaq

10,000

28 Mar

Interest

132

16 May

Bills Receivable

12,000

16 May

Interest

360

80,623

80,623

 

Mustaq’s Account

Dr.

Cr.

Date

Particulars

J.F.

Amount 

Date

Particulars

J.F.

Amount 

2016

2016

13 Feb

B/R

10,000

28 Mar

Sudershan

10,000

13 Feb

Discount Received

200

28 Mar

Discount Received

200

10,200

10,200

Books of Sudershan

Journal

Date

Particulars

L.F.

Debit ₹

Credit₹

2016

13 Feb

Purchases A/c

Dr.

40,000

To Ravi

40,000

(Goods purchased from Ravi)

13 Feb

Ravi

Dr.

40,000

To Bills Payable A/c

40,000

(Four bills drawn by Ravi accepted: the first bill for

₹ 5,000 payable after one month, the second for

₹ 10,000 payable after 40 days, the third for ₹ 12,000

payable after 3 months and the fourth for ₹ 13,000

payable after 19 days)

07 Mar

Bills Payable A/c

Dr.

13,000

To Ravi

13,000

(The fourth bill dishonoured)

07 Mar

Interest A/c

Dr.

81

To Ravi

81

(Interest charged for the amount of fourth bill

at 12% p.a.)

10 Mar

Ravi

Dr.

13,081

To Cash A/c

13,081

(Cash paid to Ravi for amount due on account of

dishonour of the fourth bill along with interest

at 12% p.a. for 19 days)

16 Mar

Bills Payable A/c

Dr.

5,000

To Ravi

5,000

(The first bill dishonoured)

16 Mar

Interest A/c

Dr.

50

To Ravi

50

(Interest charged at 12% p.a. on the first bill for one month)

19 Mar

Ravi

Dr.

5,050

To Cash A/c

5,050

(Cash paid to Ravi for amount due on account of

dishonour of the first bill along with interest

at 12% p.a. for one month)

28 Mar

Bills Payable A/c

Dr.

10,000

To Ravi

10,000

(The second bill dishonoured)

28 Mar

Interest A/c

Dr.

132

To Ravi

132

(Interest charged at 12% p.a. for 40 days on the second bill)

01 Apr

Ravi

Dr.

10,132

To Cash A/c

10,132

(Cash paid to Ravi for amount due on account of

dishonour of the second bill along with interest

at 12% p.a. for 40 days)

16 May

Bills Payable A/c

Dr.

12,000

To Ravi

12,000

(The third bill dishonoured)

16 Mar

Interest A/c

Dr.

360

To Ravi

360

(Interest charged at 12% p.a. for 3 months on third bill)

19 May

Ravi

Dr.

12,360

To Cash A/c

12,360

(Cash paid to Ravi for amount due on account of

dishonour of the third bill along with interest

at 12% p.a. for 3 months)

 

Question - 33 : - On Jan 01, 2016 Neha sold goods for ₹ 20,000 to Muskan and drew upon her a bill of exchange payable after two months. One month before the maturity of the bill Muskan approached Neha to accept the payment against the bill at a rebate @ 12% p.a. Neha agreed to the request of Muskan and Muskan retired the bill under the agreed rate of rebate. Journalise the above transaction in the books of Neha and Muskan.

Answer - 33 : -

Books of Neha

Journal

Date

Particulars

L.F.

Debit ₹

Credit₹

2016

01 Jan

Muskan

Dr.

20,000

To Sales A/c

20,000

(Goods tradedto Muskan)

01 Jan

Bills Receivable A/c

Dr.

20,000

To Muskan

20,000

(Muskan’s acceptance received)

04 Feb

Cash A/c

Dr.

19,800

Rebate on bill A/c

Dr.

200

To Bills Receivable A/c

20,000

(Muskan’s acceptance retired one month before

maturity and allowed rebate at 12% p.a.)

  

Books of Muskan

Journal

Date

Particulars

L.F.

Debit ₹

Credit₹

2016

01 Jan

Purchases A/c

Dr.

20,000

To Neha

20,000

(Goods purchased from Neha)

01 Jan

Neha

Dr.

20,000

To Bills Payable A/c

20,000

(Bill drawn by Neha payable after 2 months

accepted)

04 Feb

Bills Payable A/c

Dr.

20,000

To Cash A/c

19,800

To Rebate on Bills A/c

200

(Bill paid one month before maturity and received

Rebate at 12% p.a.)

 

Question - 34 : - On Jan 15, 2016 Raghu sold goods worth ₹ 35,000 to Devendra and drew up to the latter three bills of exchanges. The first bill was for ₹ 5,000 payable after one month, the second bill was for ₹ 20,000 payable after three months and third bill for balance amount for 4 months. Raghu endorsed the first bill in favour of his creditor Dewan in full settlement of a debt of ₹ 5,200. The second bill was discounted by Raghu @ 6 % p.a. and the third bill was retained by Raghu till the date of maturity. Devendra dishonoured the bill on maturity and the bank paid ₹ 30 as noting charges. Four days before the maturity of the third bill Raghu, sent the same for collection to his bank. The third bill was also dishonoured by Devendra and the bank paid ₹ 200 as noting charges. Five days after the dishonour of the bill Devendra paid the entire amount due to Raghu along with interest ₹ 1,000 for this purpose Devendra obtained a short term loan from his bank. You are requested to record the necessary journal entries in the books of Raghu Devendra and Dewan and also prepare Devendra’s account in Raghu’s books and Raghu’s account in Devendra’s account.

Answer - 34 : -

 

Books of Raghu

Journal

Date

 

Particulars

 

L.F.

Debit ₹

Credit₹

2016

15 Jan

Devendra

Dr.

35,000

To Sales A/c

35,000

(Goods tradedto Devendra)

15 Jan

Bills Receivable A/c

Dr.

35,000

To Devendra

35,000

(Three bills received from Devendra–the first bill ₹ 5,000,

the second bill ₹ 20,000, the third bill ₹ 10,000)

15 Jan

Dewan

Dr.

5,200

To Bills Receivable A/c

5,000

To Discount Received A/c

200

(The first bill endorsed to Dewan in full settlement

of amount due to him)

15 Jan

Bank A/c

Dr.

19,700

Discount A/c

Dr.

300

To Bills Receivable A/c

20,000

(The second bill discounted with bank at 6% p.a.)

18 Apr

Devendra

Dr.

20,030

To Bank A/c

20,030

(The second bill dishonoured and bank paid

₹ 30 for noting charges)

14 May

Bill Sent for Collection A/c

Dr.

10,000

To Bills Receivable A/c

10,000

(The third bill sent to bank for collection)

18 May

Devendra

Dr.

10,200

To Bill sent for collection A/c

10,000

To Bank A/c

200

(The third bill dishonoured and bank paid ₹ 200

as noting charges)

23 May

Devendra

Dr.

1,000

To Interest A/c

1,000

(Interest due to Devendra on account of bills

dishonoured)

23 May

Cash A/c

Dr.

31,230

To Devendra

31,230

(Cash received from Devendra)

Ledger 

Devendra’s Account

Dr.

Cr.

Date

Particulars

J.F.

Amount ₹

Date

Particulars

J.F.

Amount ₹

2016

2016

15 Jan

Sales

35,000

15 Jan

Bills Receivable

35,000

18 Apr

Bank

20,030

23 May

Cash

31,230

18 May

Bills Sent for Collection

10,000

18 May

Bank

200

23 May

Interest

1,000

66,230

66,230

 

Books of Devendra

Journal

Date

Particulars

L.F.

Debit ₹

Credit₹

2016

15 Jan

Purchases A/c

Dr.

35,000

To Raghu

35,000

(Goods purchased from Raghu)

15 Jan

Raghu

Dr.

35,000

To Bills Payable A/c

35,000

(Three bills drawn by Raghu accepted: the first bill for

₹ 5,000 payable after one month, the second for ₹ 20,000

payable after 3 months and the third for ₹ 10,000

payable after 4 months)

18 Feb

Bills Payable A/c

Dr.

5,000

To Cash

5,000

(The first bill discharged on the due date)

18 Apr

Bills Payable A/c

Dr.

20,000

Noting Charges A/c

Dr.

30

To Raghu

20,030

(The second bill dishonoured and Noting Charges

₹ 30)

18 May

Bills Payable A/c

Dr.

10,000

Noting Charges A/c

Dr.

200

To Raghu

10,200

(The third bill dishonoured and Noting Charges ₹ 200)

23 May

Interest A/c

Dr.

1,000

To Raghu

1,000

(Interest charged ₹ 1,000 on account of

bills dishonoured)

23 May

Cash A/c

Dr.

31,230

To Bank Loan A/c

31,230

(Bank loan taken for settling Raghu’s account)

23 May

Raghu

Dr.

31,230

To Cash A/c

31,230

(Cash paid to Raghu)

Ledger

Raghu’s Account

Dr.

Cr.

Date

Particulars

J.F.

Amount 

Date

Particulars

J.F.

Amount 

2016

2016

15 Jan

Bills Payable

35,000

15 Jan

Purchases

35,000

23 May

Cash

31,230

18 Apr

Bills Payable

20,000

18 Apr

Noting Charges

30

18 May

Bills Payable

10,000

18 May

Noting Charges

200

18 May

Interest

1,000

66,230

66,230

 

Books of Dewan

Journal

Date

Particulars

L.F.

Debit ₹

Credit₹

2016

15 Jan

Bills Receivable A/c

Dr.

5,000

Discount Allowed A/c

Dr.

200

To Raghu

 5,200

(Bill Receivable received from Raghu for one month and

allowed him discount of ₹ 200)

18 Feb

Cash A/c

Dr.

5,000

To Bills Receivable A/c

5,000

(Bill met on maturity)

 

Question - 35 : -
Vimal purchased goods ₹ 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.

Answer - 35 : -

(i): The bill was retained by Kamal till the date of its maturity

Books of Kamal

Journal

Date

Particulars

L.F.

Debit ₹

Credit₹

2016

15 Jan

Vimal

Dr.

25,000

To Sales A/c

25,000

(Goods tradedto Vimal)

15 Jan

Bills Receivable A/c

Dr.

25,000

To Vimal

25,000

(Vimal’s acceptance received)

18 Mar

Vimal

Dr.

25,000

To Bills Receivable A/c

25,000

(Vimal acceptance dishonoured)

Books of Vimal

Journal

Date

Particulars

L.F.

Debit

Amount

Credit

Amount

2016

15 Jan

Purchases A/c

Dr.

25,000

To Kamal

25,000

(Goods purchased from Kamal)

15 Jan

Kamal

Dr.

25,000

To Bills Payable A/c

25,000

(Bill drawn by Kamal accepted)

18 Mar

Bills Payable A/c

Dr.

25,000

To Kamal

25,000

(Bill drawn by Kamal dishonoured)

(ii): The bill was immediately discounted by Kamal with his bank @ 6% p.a.

Books of Kamal

Journal

Date

Particulars

L.F.

Debit ₹

Credit₹

2016

15 Jan

Vimal

Dr.

25,000

To Sales A/c

25,000

(Goods tradedto Vimal)

15 Jan

Bills Receivable A/c

Dr.

25,000

To Vimal

25,000

(Vimal’s acceptance received)

15 Jan

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)

18 Mar

Vimal

Dr.

25,000

To Bank A/c

25,000

(Vimal’s acceptance dishonoured)

Books of Vimal

Journal

Date

Particulars

L.F.

Debit ₹

Credit₹

2016

15 Jan

Purchases A/c

Dr.

25,000

To Kamal

25,000

(Goods purchased from Kamal)

15 Jan

Kamal

Dr.

25,000

To Bills Payable A/c

25,000

(Bill drawn by Kamal accepted)

18 Mar

Bills Payable A/c

Dr.

25,000

To Kamal

25,000

(Bill drawn by Kamal dishonoured)

Case(iii) : The bill was endorsed by Kamal in favour of his creditor Sharad

Books of Kamal

Journal

Date

Particulars

L.F.

Debit ₹

Credit₹

2016

15 Jan

Vimal

Dr.

25,000

To Sales A/c

25,000

(Goods tradedto Vimal)

15 Jan

Bills Receivable A/c

Dr.

25,000

To Vimal

25,000

(Vimal’s acceptance received)

15 Jan

Sharad

Dr.

25,000

To Bills Receivable A/c

25,000

(Vimal’s acceptance endorsed to Sharad)

18 Mar

Vimal

Dr.

25,000

To Sharad

25,000

(Vimal’s acceptance endorsed to Kamal dishonoured)

Books of Vimal

Journal

Date

Particulars

L.F.

Debit ₹

Credit₹

2016

15 Jan

Purchases A/c

Dr.

25,000

To Kamal

25,000

(Goods purchased from Kamal)

15 Jan

Kamal

Dr.

25,000

To Bills Payable A/c

25,000

(Bill drawn by Kamal accepted)

18 Mar

Bills Payable A/c

Dr.

25,000

To Kamal

25,000

(Bill drawn by Kamal dishonoured)

Case(IV): Five days before its maturity the bill was sent by Kamal to his bank forcollection

Books of Kamal

Journal

Date

Particulars

L.F.

Debit ₹

Credit₹

2016

15 Jan

Vimal

Dr.

25,000

To Sales A/c

25,000

(Goods tradedto Vimal)

15 Jan

Bills Receivable A/c

Dr.

25,000

To Vimal

25,000

(Vimal’s acceptance received, payable after two months)

Mar.13

Bill Sent for Collection A/c

Dr.

25,000

To Bills Receivable A/c

25,000

(Vimal’s acceptance sent to bank for collection)

18 Mar

Vimal

Dr.

25,000

To Bill Sent for Collection

25,000

(Vimal’s acceptance dishonoured)

Books of Vimal

Journal

Date

Particulars

L.F.

Debit ₹

Credit₹

Case (iii)

2016

15 Jan

Purchases A/c

Dr.

25,000

To Kamal

25,000

(Goods purchased from Kamal)

15 Jan

Kamal

Dr.

25,000

To Bills Payable A/c

25,000

(Bill drawn by Kamal accepted)

18 Mar

Bills Payable A/c

Dr.

25,000

To Kamal

25,000

(Bill drawn by Kamal dishonoured)

 

Question - 36 : - 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 - 36 : -

 

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

 

Question - 37 : -
Asha sold goods worth ₹ 19,000 to Nisha on March 02, 2017. ₹ 4,000 were paid by Nisha immediately and for the balance she accepted a bill of exchange drawn upon her by Asha payable after three months. Asha discounted the bill immediately with her bank. On the due date Nisha dishonoured the bill and the bank paid ₹ 30 as noting charges.

Record the necessary journal entries in the books of Asha and Nisha.

Answer - 37 : -

Books of Asha

Journal

Date

Particulars

L.F.

Debit ₹

Credit₹

2017

02 Mar

Nisha

Dr.

19,000

To Sales A/c

19,000

(Goods tradedto Nisha)

02 Mar

Cash A/c

Dr.

4,000

Bills Receivable A/c

Dr.

15,000

To Nisha

19,000

(Cash and Nisha’s acceptance received)

02 Mar

Bank A/c

Dr.

14,635

Discount A/c

Dr.

375

To Bills Receivable A/c

15,000

(Nisha’s acceptance discounted with bank at 10% p.a.)

Note: In this question rate of discount is not 

given, the rate of discount (10% p.a.) has been

 assumed).

05 Jun

Nisha

Dr.

15,030

To Bank A/c

15,030

(Nisha’s acceptance dishonoured and bank

paid ₹ 30 as noting charges)

Books of Nisha

Journal

Date

Particulars

L.F.

Debit 

Credit₹

2017

02 Mar

Purchases A/c

Dr.

19,000

To Asha

19,000

(Goods purchased from Asha)

02 Mar

Asha

Dr.

19,000

To Bills Payable A/c

15,000

To Cash A/c

4,000

(Asha’s bill accepted payable after three month and

₹ 4,000 paid in cash)

Jun.05

Bills Payable A/c

Dr.

15,000

Noting Charges A/c

Dr.

30

To Asha

15,030

(Asha’s bill dishonoured)

 

Question - 38 : -
On Feb. 02, 2017, Verma purchased from Sharma goods for ₹ 17,500. Verma paid ₹ 2,500 immediately and for the balance gave a promissory note to Sharma payable after 60 days. Sharma immediately endorsed the promissory note in favour of his creditor.

Gupta for the full settlement of a debt of ₹ 15,400. On the due date of the bill Gupta presented the bill to Verma which the latter dishonoured and Gupta paid ₹ 5,000 noting charges. On the same date Gupta informed Sharma about the dishonour of the bill. Sharma settled his debt to Gupta by cheque for ₹ 15,500 which includes noting charges and interest. Verma settled Sharma’s claim by cheque for the same amount.

Record the necessary journal entries is the books of Sharma, Gupta and Verma for the above transaction and prepare Verma’s and Gupta’s accounts in the books of Sharma. Sharma’s account in the books of Verma. And also Sharma’s account in the books of Gupta.

Answer - 38 : -

Books of Sharma

Journal

Date

Particulars

L.F.

Debit ₹

Credit₹

2017

02 Feb

Verma

Dr.

17,500

To Sales A/c

17,500

(Goods tradedto Verma)

02 Feb

Cash A/c

Dr.

2,500

Bills Receivable A/c

Dr.

15,000

To Verma

17,500

(Cash ₹ 2,500 and Promissory Note ₹ 15,000 received

from Verma for 60 days)

02 Feb

Gupta A/c

Dr.

15,400

To Bills Receivable A/c

15,000

To Discount Received A/c

400

(Promissory Note endorsed to Gupta in full settlement

of amount due to him)

05 Apr

Discount Received A/c

Dr.

400

Verma

Dr.

15,050

To Gupta

15,450

(Promissory Note issued by Verma dishonoured

and Gupta paid ₹ 50 as noting charges)

Note: In this question ₹ 5,000 is given as noting charges,

there is mistake. Here ₹ 50 has been taken as noting

charges instead of ₹ 5,000).

06 Apr

Interest A/c

Dr.

50

To Gupta

50

(Interest of ₹ 50 debited to Gupta, on account of

dishonour of Promissory Note)

06 Apr

Gupta

Dr.

15,500

To Bank A/c

15,500

(Gupta’s A/c settled)

06 Apr

Bank A/c

Dr.

15,050

To Verma

15,050

(Cheque received from Verma for the amount due from him)

Ledger

Verma’s Account

Dr.

Cr.

Date

Particulars

J.F.

Amount ₹

Date

Particulars

J.F.

Amount ₹

2017

2017

02 Feb

Sales

17,500

02 Feb

Cash

2,500

06 Apr

Gupta

15,050

02 Feb

Bills Receivable

15,000

06 Apr

Bank

15,050

32,550

32,550

 

Gupta’s Account

Dr.

Cr.

Date

Particulars

J.F.

Amount

Date

Particulars

J.F.

Amount

2017

2017

02 Feb

B/R

15,000

01 Apr

Balance b/d

15,400

02 Feb

Discount Received

400

06 Apr

Verma

15,050

02 Feb

Bank

15,500

06 Apr

Discount Reserved

400

06 Apr

Interest

50

30,900

30,900

Books of Verma

Journal

Date

Particulars

L.F.

Debit ₹

Credit₹

2017

02 Feb

Purchases A/c

Dr.

17,500

To Sharma

17,500

(Goods purchased from Sharma)

02 Feb

Sharma

Dr.

17,500

To Bills Payable A/c

15,000

To Cash A/c

2,500

(Cash ₹ 2,500 paid and Promissory Note made for

the balance)

06 Apr

Bills Payable A/c

Dr.

15,000

Noting Charges A/c

Dr.

50

To Sharma

15,050

(Promissory Note dishonoured on maturity)

06 Apr

Sharma

Dr.

15,050

To Bank A/c

15,050

(Payment made to Sharma through cheque)

 

Ledger

 Sharma’s Account

Dr.

Cr.

Date

Particulars

J.F.

Amount

Date

Particulars

J.F.

Amount

2017

2017

02 Feb

Cash

2,500

02 Feb

Purchases

17,500

02 Feb

Bills Payable

15,000

06 Apr

Bills Payable

15,000

06 Apr

Bank

50

06 Apr

Noting Charges

50

30,900

30,900

Books of Gupta

Journal

Date

Particulars

L.F.

Debit ₹

Credit₹

2017

02 Feb

Bills Receivable A/c

Dr.

15,000

Discount Allowed A/c

Dr.

400

To Sharma

15,400

(Promissory Note ₹ 15,000 received from Sharma in

full settlement for 60 days)

06 Apr

Sharma

Dr.

15,450

To Bills Receivable A/c

15,000

To Discount Allowed A/c

400

To Bank A/c

50

(Promissory note established from Sharma, dishonoured)

06 Apr

Sharma

Dr.

50

To Interest A/c

50

(Interest ₹ 50 credited on account of Promissory Note

dishonoured)

06 Apr

Bank A/c

Dr.

15,500

To Sharma

15,500

(Cheque received from Sharma)

 

Ledger

 Sharma’s Account

Dr.

Cr.

Date

Particulars

J.F.

Amount

Date

Particulars

J.F.

Amount

2017

2017

01 Feb

Balance b/d

15,400

02 Feb

Bills Receivable

15,000

06 Apr

Bills Receivable

15,000

02 Feb

Discount Allowed

400

06 Apr

Discount Allowed

4,000

06 Apr

Bank

15,500

06 Apr

Bank

50

06 Apr

Interest

50

30,900

30,900

 

Question - 39 : - Lilly sold goods to Mathew on 1.3.2017 for ₹ 12,000 and drew upon Mathew a bill of exchange for the same amount payable after two months. Lilly immediately discounted the bill with her bank at 9% p.a. The maturity date of the bill was a non-business day (holiday), therefore, Lilly had to present the bill as per the provisions of the Indian Instruments Act.1881. The bill was dishonoured by Mathew and Lilly paid ₹ 45 as noting charges. Mathew settled the claim of Lilly five days after the dishonour of the bill by a cheque, which includes interest @ 12% for the term of the bill. Journalise the above transactions in the books of Lilly and Mathew and prepare Mathew’s account in the books of Lilly and Lilly’s account in the books of Mathew.

Answer - 39 : -

Books of Lilly

Journal

Date

Particulars

L.F.

Debit ₹

Credit₹

2017

01 Mar

Mathew

Dr.

12,000

To Sales A/c

12,000

(Goods tradedto Mathew)

01 Mar

Bills Receivable A/c

Dr.

12,000

To Mathew

12,000

(Mathew’s acceptance payable after two months received)

01 Mar

Bank A/c

Dr.

11,820

Discount A/c

Dr.

180

To Bills Receivable A/c

12,000

(Mathew’s bill discounted at 9% p.a.)

03 May

Mathew A/c

Dr.

12,045

To Bank A/c

12,045

(Mathew’s acceptance dishonoured bank paid ₹ 45 as

noting charges)

Note: In this question, May 04 has been considered as

Holiday, so the date of maturity will be 03 May, 2017 in

place of May 04, 2017.

08 May

Mathew

Dr.

241

To Interest A/c

241

(Interest @ 12% credited to Mathew on account of bill dishonoured)

08 May

Bank A/c

Dr.

12,286

To Mathew

12,286

(Cheque received from Mathew for the amount due from him)

Ledger

Mathew’s Account

Dr.

Cr.

Date

Particulars

J.F.

Amount ₹

Date

Particulars

J.F.

Amount ₹

2017

2017

01 Mar

Sales

12,000

01 Mar

Bills Receivable

12,000

03 May

Bank

12,045

08 May

Bank

12,286

08 May

Interest

241

24,286

24,286

 

Books of Mathew

Journal

Date

Particulars

L.F.

Debit ₹

Credit₹

2017

01 Mar

Purchases A/c

Dr.

12,000

To Lilly

12,000

(Goods purchased from Lilly)

01 Mar

Lilly

Dr.

12,000

To Bills Payable A/c

12,000

(Lilly’s acceptance payable after two months accepted)

03 May

Bills Payable A/c

Dr.

12,000

Noting Charges A/c

Dr.

45

To Lilly

12,045

(Bill drawn by Lilly dishonoured)

08 May

Interest A/c

Dr.

241

To Lilly

241

(Interest charged @ 12% from Lilly on account of bill dishonoured)

08 May

Lilly

Dr.

12,286

To Bank A/c

12,286

(Amount paid to Lilly through cheque)

Ledger

 Lilly’s Account

Dr.

Cr.

Date

Particulars

J.F.

Amount ₹

Date

Particulars

J.F.

Amount ₹

2017

2017

01 Mar

Bills Payable

12,000

01 Mar

Purchases

12,000

09 May

Bank

12,286

03 May

Bills Payable

12,000

03 May

Noting charges

45

08 May

Interest

241

24,286

24,286

 

Question - 40 : - Kapil purchased goods for ₹ 21,000 from Gaurav on 1.2.2017 and accepted a bill of exchange drawn by Gaurav for the same amount. The bill was payable after one month. On 25.2.2017 Gaurav sent the bill to his bank for collection. The bill was duly presented by the bank. Kapil dishonoured the bill and the bank paid ₹ 100 as noting charges. Record the necessary journal entries for the above transactions in the books of Kapil and Gourav.

Answer - 40 : -

Books of Gaurav

Journal

Date

Particulars

L.F.

Debit ₹

Credit₹

2017

01 Feb

Kapil

Dr.

21,000

To Sales A/c

21,000

(Goods tradedto Kapil)

01 Feb

Bills Receivable A/c

Dr.

21,000

To Kapil

21,000

(Kapil’s acceptance received)

25 Feb

Bills Sent for Collection A/c

Dr.

21,000

To Bills Receivable A/c

21,000

(Bill Receivable sent to bank for collection)

04 Mar

Kapil

Dr.

21,100

To Bill Sent for Collection A/c

21,000

To Bank A/c

100

(Kapil’s acceptance dishonoured)

Books of Kapil

Journal

Date

Particulars

L.F.

Debit ₹

Credit₹

2017

01 Feb

Purchases A/c

Dr.

21,000

To Gaurav

21,000

(Goods purchased from Gaurav)

01 Feb

Gaurav

Dr.

21,000

To Bills Payable A/c

21,000

(Bill drawn by Gaurav payable after one month

accepted)

04 Mar

Bills Payable A/c

Dr.

21,000

Noting Charges A/c

Dr.

100

To Gaurav

21,100

(Bill drawn by Kapil dishonoured)

 

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