Bill Of Exchange - Class 11 Commerce Accountancy - Extra Questions

There are ___________ parties to a promissory note.

Two.


What is meant by renewal of a bill exchange?

When the acceptor of the bill approach the drawer with the request for extension of time for payment, the old bill is cancelled and the fresh bill with new terms of payment is drawn and duty accepted and delivered. This is called renewal of the bill.


Briefly explain the effects of dishonour and noting of a bill of exchange.

Dishonour of a bill means refusal to pay or inability to pay by the debtor because of insolvency. In other words, a bill is said to have been dishonoured when the drawee fails to make the payment on the date of maturity. In this situation, liability of the acceptor is restored. When a bill is dishonoured, it is always better if it is certified by a notary which is known as noting.
So, it is an ample proof that a bill is dishonoured which is noted down on the face to it. For this, the noting charges something known as notary charge or noting charges which may be recovered from the person who responsible for the dishonour of the bill.
The notary is compulsory in case of foreign bill as required under the law of that country whereas it is not so in case of inland bills. It is done with a view to have a proof of dishonouring the bill. So, it is very useful. Notary has to assign reasons for dishonour of a bill along with date of dishonour and charges made by him. It is to be noted that whosever pays the noting charges, ultimately these have to be borne by the drawee.


Ritesh and Naina were in need of funds temporarily. On August $$1$$, $$2010$$, Ritesh drew upon Naina a bill for Rs. $$12,000$$ for $$4$$ months. Naina accepted the bill and returned to Ritesh. Ritesh discounted the bill at the rate of $$8\%$$ per annum. Half amount of the discounted bill remitted to Naina. On due date, Ritesh sent the required sum to Naina, who met the bill.
Journalise the transaction in the books of both the parties.

In the Books of Ritesh
Journal Entries
DateParticularsLFAmt.(Dr)Amt.(Cr)
$$2010$$
Aug $$1$$Bills Receivable A/c               Dr
To Naina
(Being acceptance received)
$$12,000$$$$12,000$$
Aug $$5$$Bank A/c                        Dr
Discount A/c                       Dr
To Bills Receivable A/c
(Being bill discounted with bank)
$$11,680$$
$$320$$
$$12,000$$
Aug $$1$$Naina                         Dr
To Cash A/c
To Discount A/c
(Being half of the amount of bill sent to Naina with discount)
$$6,000$$$$5840$$
$$160$$
Dec $$4$$Naina                     Dr
To Cash A/
(Being remittance to Naina for paying off accommodation bill)
$$6,000$$$$6,000$$
In the Books of Naina
Journal Entries
DateParticularsLFAmt.(Dr)Amt.(Cr)
$$2010$$
Aug $$1$$Ritesh                  Dr
To Bills Payable A/c
(Being acceptance given)
$$12,000$$$$12,000$$
Aug $$1$$Cash A/c                   Dr
Discount A/c                    Dr
(Being half of the amount of bill received)
$$5,840$$
$$160$$
$$6,000$$
Dec $$4$$Cash A/c                       Dr
To Ritesh
(Being Ritesh remittance received for paying off the bill)
$$6,000$$$$6,000$$
Dec $$4$$Bills Payable A/c
To Bank A/c
(Being bills payable paid on due date)
$$12,000$$$$12,000$$



On November $$1$$, $$2010$$, Sonia drawn a bill on Sunny for Rs. $$15,000$$ for $$3$$ months for mutual accommodation. Sunny accepts the bill and return it to Sonia. Sonia discounted the same with his bankers at the rate of $$6\%$$ per annum. The proceeds are shared between Sonia and Sunny in proportion of $$2/3$$rd and $$1/3$$rd respectively. On the due date, Sonia remits his proportion to Sunny who fails to met the bill and as a result Sonia has to meet it. Sunny give a fresh acceptance for the amount due to Sonia plus interest of Rs. $$100$$ Sunny meet his second acceptance on due date.
Record the necessary Journal entries in the books of Sonia and Sunny.

In the Books of Sonia
Journal Entries
DateParticularsLFAmt.(Dr)Amt.(Cr)
$$2010$$
Nov $$1$$Bills Receivable A/c                      Dr
To Sunny
(Being acceptance for accommodation bill received)
$$15,000$$$$15,000$$
Nov $$1$$Bank A/c                    Dr
Discount A/c                       Dr
To Bills Receivable A/c
(Being bill dishonoured with bank at the rate of $$6\%$$ per annum)
$$14,775$$
$$225$$
$$15,000$$
Nov $$1$$Sunny                            Dr
To Cash A/c
To Discount A/c
(Being $$1/5$$ of the accommodation bill amount sent to Sunny)
$$5,000$$$$4,925$$
$$75$$
$$2011$$

Feb $$4$$Sunny                            Dr
To Cash A/c
(Being remittance to Sunny for paying off the accommodation bill)

$$10,000$$$$10,000$$
Feb $$4$$Sunny                          Dr
To Bank A/c
(Being bill dishonoured by Sunny on due date)

$$15,000$$$$15,000$$
Feb $$4$$Bank A/c                    Dr
To Cash A/c
(Being acceptance of Sunny met on maturity)

$$15,000$$$$15,000$$
Feb $$4$$Sunny                      Dr
To interest A/c
(Being interest due)

$$100$$$$100$$
Feb $$04$$Bills Receivable A/c                    Dr
To Sunny
(Being fresh acceptance received)
$$15,100$$$$15,100$$
Mar $$7$$Cash A/c                           Dr
To Bills Receivable A/c
(Being payment received on maturity from Sunny)
$$15,100$$$$15,100$$
Note: Due date of new bill is assumed to be one month.
In the Books of Sunny
Journal Entries
DateParticularsLFAmt.(Dr)Amt.(Cr)
$$2010$$
Nov $$1$$Sonia                             Dr
To Bills Payable A/c
(Being acceptance given for accommodation bill of Sonia)
$$15,000$$$$15,000$$
Nov $$1$$Cash A/c                     Dr
Discount A/c                    Dr
To Sonia
(Being $$1/3$$ of the accommodation bill amount received and discounted
$$4,925$$
$$75$$
$$5,000$$
$$2011$$
Feb $$4$$Cash A/c                          Dr
To Sonia
(Being remittance received from Sonia)
$$10,000$$$$10,000$$
Feb $$4$$Bills Payable A/c                     Dr
To Sonia
(Being bill dishonoured on maturity)
$$15,000$$$$15,000$$
Feb $$4$$Interest A/c                      Dr
To Sonia
(Being interest due)
$$100$$$$100$$
Feb $$4$$Sonia                                 Dr
To Bills Payable A/c
(Being second bill accepted)
$$15,100$$$$15,100$$
Mar $$7$$Bills Payable A/c                   Dr
To Cash A/c
(Being acceptance paid on maturity)
$$15,100$$$$15,100$$



Vishal sold goods for Rs. $$7,000$$ to Manju on January $$5$$, $$2011$$ and drew upon her a bill of exchange payable after $$2$$ months. Manju accepted Vishal's draft and handed over the same to Vishal after acceptance. Vishal immediately discounted the bill with his bank at the rate of $$12\%$$ per annum. On the due date, Manju met her acceptance.
Journalise the above transactions in the books of Vishal and Manju.

In the Books of Vishal
Journal Entries
DateParticularsLFAmt.(Dr)Amt.(Cr)
$$2011$$
Jan $$5$$Manju                           Dr
To Sales A/c
(Being goods sold to Manju)
$$7,000$$$$7,000$$
Jan $$5$$Bills Receivable A/c                   Dr
To Manju
(Being acceptance received)
$$7,000$$$$7,000$$
Jan $$5$$Bank A/c                  Dr
Discount A/c               Dr
To Bills Receivable A/c
(Being Bill discounted with the bank at the rate of $$12\%$$ per annum)
$$6,860$$
$$140$$
$$7,000$$
Working Note
Calculation of Interest$$=7,000\times \displaystyle\frac{12}{100}\times \frac{2}{12}=$$Rs. $$140$$
In the Books of Manju
Journal Entries
DateParticularsLFAmt.(Dr)Amt.(Cr)
$$2011$$
Jan $$5$$Purchase A/c               Dr
To Vishal
(Being goods purchased from Vishal)
$$7,000$$$$7,000$$
Jan $$1$$Vishal                   Dr
To Bills Payable A/c
(Being acceptance given)
$$7,000$$$$7,000$$
Mar $$8$$Bills Payable A/c                           Dr
To Bank A/c
(Being bills payable paid on maturity)
$$7,000$$$$7,000$$



Question: Calculate the amount of bills receivable dishonoured from the following information

(Rs)
Opening balance of bills receivable$$1,20,000$$
Bills collected (honoured)$$1,85,000$$
Bills receivable endorsed$$22,800$$
Closing balance of bills receivable$$50,700$$
Bill receivable received$$1,50,000$$

Answer 

Dr                                    Bills Receivable Account                       Cr

DateParticularsJFAmt. (Rs)DateParticularsJFAmt.(Rs)
To Balance b/d$$1,20,000$$By Cash/Bank (Bills honoured)$$1,85,000$$
To Debtor (Bills received)(Acceptances)$$1,50,000$$By Bills Endorsed$$22,800$$
By Debtors (Bills dishonoured)(Balancing Figure)$$11,500$$
$$2,70,000$$By Balance c/d$$50,700$$


Briefly explain the purpose and benefits of retiring a bill of exchange to the debtor and the creditor.

There are instances when a bill of exchange is arranged to be retired before the due date by mutual understanding between the drawer and the drawee. This happens when the drawee of the bill has funds at his disposal and makes a request to the drawer or holder to accept the payment of the bill before its maturity.
If the holder agrees to do so, the bill is said to have been retired. The retiring of a bill draws a curtain on the bill transactions before the expiry of its normal term.
To encourage the retirement of the bill, the holder allows some discount called rebate on bills for the period between date of retirement and maturity. The rebate is calculate at a certain rate of interest. The accounting treatment on the retirement of a bill is similar to the accounting treatment when a bill is honoured by the acceptor on the due date in the ordinary course. The only difference between the two relates to the granting of rebate.


Sayali sold goods on credit to Manali for Rs. $$40,000$$. Sayali draws a bill on Manali for $$4$$ months for the amount due. Manali accepted the bill and returned it to Sayali. After a month, Sayali discounted the bill with her bank at $$12\%$$ p.a.
On the due date, bank informed that the bill is dishonoured and bank paid the noting charges Rs. $$300$$. Manali requested Sayali to renew the bill. Sayali agreed on conditions that Manali should pay Rs. $$20,000$$ in cash along with noting charges and accept a new bill for the balance amount with interest at $$15\%$$ p.a. for $$3$$ months.
These arrangements were carried through. Before the due date Manali was declared insolvent and only $$40\%$$ of the amount due could be recovered from her private estate as final dividend.
Give Journal Entries in the books of Sayali.


1160991_864946_ans_c9943cad09e1439c9b57e814d986176d.png


Answer the following questions in 'one' sentence each:
What are Noting Charges?

Noting is the recording of the fact of dishonor by a notary public which becomes an evidence of dishonor. When a bill of exchange is dishonor, in order to prove the fact, the holder may get the bill noted. Charges paid on noting are called as noting charges.


What is 'retirement of a bill of exchange'?

A bill of exchange is usually honored only on the maturity date. But, in some cases, it can be honored before time. This is known as Retirement of Bills of Exchange. Also, a bill may be canceled before time and a new bill may be written in its place. This is known as Renewal of Bills of exchange.



Find the true discount, banker's discount and banker's gain on a bill of $$Rs. 36,600$$ due $$4$$ months hence at $$5\% p.a.$$

$$FV=PW+$$ Int on $$PW$$ for $$4$$ months $$@$$ $$5$$% p.a.
$$36600=PW+PW\times\dfrac{4}{12}\times\dfrac{5}{100}$$
$$36600=PW+\dfrac{PW}{60}$$
$$PW=\dfrac{36600\times60}{61}$$
$$PW=Rs. 36,000$$

$$TD=$$ Int on $$PW$$ for $$4$$ months @ $$5$$% p.a.
$$TD=36000\times\dfrac{4}{12}\times\dfrac{5}{100}$$
$$TD=Rs. 600$$

$$BD=$$ Int on $$FV$$ for $$4$$ months @ $$5$$% p.a.
$$BD=36600\times\dfrac{4}{12}\times\dfrac{5}{100}$$
$$BD=Rs. 610$$

$$BG=BD-TD$$
$$BG=610-600$$
$$BG=Rs. 10$$

Hence, this is the answer.


Write a word/term/phrase as a substitute for each of the following statements:
Officer appointed by the Central Government for noting of dishonour of a bill.

Officer appointed by the Central Government for noting of dishonour of a bill Notary Public.


Convert:
$$ $2$$ to $$20$$ cents

$$ $1=100c\\ $2=200 c$$
Let $$20c=1u\\\implies 200c=10u$$


Suresh draws a bill for $$Rs. 15,000$$ on Anup on $$15^{th}$$ April, $$2020$$ for $$3$$ months, which Anup returns to Suresh after accepting the same. Suresh gets it discovered with the bank for $$rs. 14,700$$ on $$18^{th}$$ April, $$2020$$ and remits one-third amount to Anup. On the due date Suresh fails to remit the amount due to Anup, but he accepts a bill of $$Rs. 17,500$$ for $$3$$ months , which Anup discounts for $$17,100$$ and remits $$Rs. 2,825$$ to Suresh. Before the maturity of the renewed bill Suresh becomes insolvent and only $$50\%$$ was realized from his estate on $$31^{st}$$ October, $$2020$$. 
Pass necessary Journal entries for the above transactions in the books of Suresh.

W. No. $$1$$ : 
     Discount to be borne by Suresh 
     Suresh      $$=$$      $$ 10,000 + 2,825 = \dfrac{12,825}{17,100} \times 400 = 300 $$

2034143_1959272_ans_22a4542e4559400fa83f5b90ae310922.png


A bill for rupees $$7,650$$ was drawn on $$8^{th}$$ March, $$2013$$, at $$7$$ months. It was discounted on $$18^{th}$$ May, $$2013$$ and the holder of the bill received rupees $$7,497$$. What is the rate of interest charged by the bank?

Bill was drawn on $$8^{th}$$ March $$2013$$ for $$7$$ months.
Normal due date $$= 8^{th}$$ October $$2013$$
Legally due date $$= 11^{th}$$ October $$2013$$
It was discounted on $$18^{th}$$ May $$2013$$
$$\therefore$$ The unexpired period of the bill.
May            -     $$13$$ days
June           -     $$30$$ days
July            -     $$31$$ days
August        -     $$31$$ days
September  -     $$30$$ days
October      -     $$11$$ days
------------------------------------------
Total         $$=$$     $$146$$ days
$$=\dfrac{146}{365}$$ yrs
$$=\dfrac{2}{5}$$ yrs
Now banker's discount $$=(7650-7497)$$
$$=153$$.
As banker's discount $$=A\times n\times i$$
$$153=7650\times \dfrac{2}{5}\times i$$
$$\Rightarrow 765=7650\times 2\times i$$
$$\Rightarrow \dfrac{1}{20}=i$$
$$\Rightarrow i=0.05$$
Hence the required rate of interest is $$5\%$$ p.a.


A bill of Rs.$$60,000$$ payable $$10$$ months after date was discounted for Rs.$$57,300$$ on 30$$^{th}$$ June,If the rate of interest was $$11\frac{1}{4}\%$$ per annum, on what date was the bill drawn? 

 $$July$$ $$August$$ $$September$$$$October $$ $$November$$ $$Total$$
 $$31$$ $$31$$ $$30$$ $$31$$ $$23$$ $$146$$
$$FV=Rs\ 60000$$  $$CV=Rs57,300$$   $$r=11\cfrac{1}{4}\% p.a$$
Period of bill$$=10 months$$
Date of discontinuity$$=30^{th} june 2007$$

$$BD=FV - CV=60000-57300=2700$$
$$BD=\dfrac{FV\times n\times r}{100}$$
$$2700=\dfrac{60000\times n \times 45}{100 \times 4}$$

$$\therefore n=\dfrac{2}{5} years=\dfrac{2}{5}\times 365=146 days$$
$$Legal\ due\ date =Date\ of\ discount + 146$$

Referring to the Table given above,
$$Legal\ due\ date=23^{rd} Nov$$
$$Nominal\ due\ date=20^{th} Nov$$
$$Date\ of\ drawing=20^{th}\ january\ 2007$$


Darshan sold goods for Rs. $$40,000$$ to Varun on $$8.1.2011$$ 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.
$$\bullet$$ When the bill was retained by Darshan till the date of its maturity.
$$\bullet$$ When Darshan immediately discounted the bill at the rate of $$6\%$$ per annum with his bank.
$$\bullet$$ When the bill was endorsed immediately by Darshan in favour of his creditor Suresh.
$$\bullet$$ When three days before its maturity, the bill was sent by Darshan to his bank for collection.

In the Books of Darshan
Journal Entries
DateParticularsLFAmt.(Dr)Amt.(Cr)
When the bill was retained by Darshan till the date of its maturity
$$2011$$
Jan $$8$$Varun           Dr
To sales a/c                		$$40,000$$$$40,000$$
Jan $$8$$Bills Receivable A/c                      Dr
To Varun
(Being acceptance received)
$$40,000$$$$40,000$$
Mar $$11$$Cash A/c                         Dr
To Bills Receivable A/c
(Being payment received on Maturity)
$$40,000$$$$40,000$$

When Darshan immediately discounted the bill at the rate of $$6\%$$ per annum with his bank
Jan $$8$$Varun                      Dr
To Sales A/c
(Being goods sold to varun)
$$40,000$$$$40,000$$
Jan $$8$$Bills Receivable A/c                    Dr
To Varun
(Being acceptance received
$$40,000$$$$40,000$$
Jan $$8$$Bank A/c                          Dr
Discount A/c                      Dr
To Bills Receivable A/c
(Being bill discounted with the bank at the rate of $$6\%$$ per annum
$$39,600$$
$$400$$
$$40,000$$

When the bill was endorsed immediately by Darshan in favour of his creditor Suresh
Jan $$8$$Varun                     Dr
To Sales A/c
(Being goods sold to Varun)
$$40,000$$$$40,000$$
Jan $$8$$BillsBills Received A/c                 Dr
To Varun
(Being acceptance received)

$$40,000$$$$40,000$$
Jan $$8$$Suresh                     Dr
To Bills Receivable A/c
(Being bill endorsed to Suresh)
$$40,000$$$$40,000$$
DateParticularsLFAmt.(Dr)Amt.(Cr)
When three days before its maturity, the bill was sent by Darshan to his bank of collection
Jan $$8$$Varun                  Dr
To Sales A/c
(Being goods sold to Varun)
$$40,000$$$$40,000$$
Jan $$8$$Bills Receivable A/c                  Dr
To Varun
(Being acceptance received)
$$40,000$$$$40,000$$
Mar $$8$$Bill sent for Collection A/c                   Dr
To Bills Receivable A/c
(Being bill sent for collection)
$$40,000$$$$40,000$$
Mar $$8$$Bank A/c                      Dr
To Bills Sent for Collection A/c
(Being bill met on maturity)
$$40,000$$$$40,000$$
When the bill was retained by Darshan till the date of its maturity
$$2011$$
Jan $$8$$Purchase A/c                 Dr
To Darshan
(Being goods purchased)
$$40,000$$$$40,000$$
Jan $$8$$Darshan                   Dr
To Bills Payable A/c
(Being acceptance given)
$$40,000$$$$40,000$$
Mar $$11$$Bills Payable A/c                  Dr
To Cash A/c
(Being bills payable paid on maturity)
$$40,000$$$$40,000$$
When Darshan immediately discounted the bill at the rate of $$6\%$$ per annum with his bank
Jan $$8$$Purchase A/c                    Dr
To Darshan
(Being goods purchased from Darshan on credit)
$$40,000$$$$40,000$$
Jan $$8$$Darshan                Dr
To Bills Payable A/c
(Being acceptance given)
$$40,000$$$$40,000$$
Mar $$11$$Bills Payable A/c             Dr
To Bank A/c
(Being payment made on maturity)
$$40,000$$$$40,000$$

DateParticularsLFAmt.(Dr)Amt.(Cr)
When the bill was endorsed by Darshan immediately in favour of his creditor Suresh
Jan $$8$$Purchase A/c            Dr
To Darshan
(Being goods purchased)
$$40,000$$$$40,000$$
Jan $$8$$Darshan                      Dr
To Bills Payable A/c
(Being acceptance given)
$$40,000$$$$40,000$$
Mar $$11$$Bills Payable A/c                Dr
To Cash A/c
(Being payment made on maturity)
$$40,000$$$$40,000$$
When three days before its maturity, the bill was sent by Darshan to his bank for collection
Jan $$8$$Purchase A/c                Dr
To Darshan
(Being goods purchased)

$$40,000$$$$40,000$$
Jan $$8$$Darshan                 Dr
To Bills Payable A/c
(Being acceptance given)
$$40,000$$$$40,000$$
Mar $$11$$Bills Payable A/c                Dr
To Cash A/c
(Being payment made on maturity)
$$40,000$$$$40,000$$



On January $$1$$, $$2011$$, Bhanu and Naman drew on each other a bill for Rs. $$8,000$$ payable $$3$$ months after the due date for their Mutual benefit. On January $$2$$, they discounted with their bank each other's bill at $$5\%$$ per annum. On the due date, each met his own acceptance.
Give Journal entry in the books of Bhanu and Naman.

In the Books of Bhanu
Journal Entries
DateParticularsLFAmt.(Dr)Amt.(Cr)
$$2011$$
Jan $$1$$Bills Receivable A/c                         Dr
To Naman
(Being accommodation bill received)
$$8,000$$$$8,000$$
Jan $$1$$Naman                                 Dr
To Bills Payable A/c
(Being Naman accepted bill accommodation)
$$8,000$$$$8,000$$
Jan $$1$$Bank A/c                            Dr
Discount A/c                             Dr
To Bills Receivable A/c
(Being bill discounted with bank at the rate of $$5\%$$ per annum)
$$7,900$$
$$100$$
$$8,000$$
Apr $$4$$Bills Payable A/c                  Dr
To Bank A/c
(Being accommodation bill paid on maturity)
$$8,000$$$$8,000$$

In the Books of Naman
Journal Entries
DateParticularsLFAmt.(Dr)Amt.(Cr)
$$2011$$
Jan $$1$$Bhanu                                    Dr
To Bills Payable A/c
(Being Bhanu accepted bill accommodation)
$$8,000$$$$8,000$$
Jan $$1$$Bills Receivable A/c                       Dr
To Bhanu
(Being accommodation bill received)
$$8,000$$$$8,000$$
Jan $$1$$Bank A/c                          Dr
Discount A/c                         Dr
To Bills Receivable A/c
(Being bill discounted with bank at a discount of $$5\%$$)
$$7,900$$
$$100$$
$$8,000$$
Apr $$4$$Bills Payable A/c                    Dr
To Bank A/c
(Being accommodation bill paid on maturity)
$$8,000$$$$8,000$$



On January $$1$$, $$2011$$, Vibha sold goods worth Rs. $$18,000$$ to Sudha and drew upon the latter a bill of exchange for the same amount payable after two months. Sudha accepted Vibha's draft and returned the same to Vibha after acceptance. Vibha endorsed the bill immediately in favour of her creditor Geeta. Five days before the maturity of the bill Sudha requested Vibha to cancel the bill since she was short of funds. She further requested to draw a new bill upon her including interest of Rs. $$200$$. Vibha accepted Sudha's request. Vibha took the bill from Geeta by making the payment to her in cash and cancelled the same. Then. she drew a new bill upon Sudha as agreed. The new bill was payable after one month. The new bill was duly met by Sudha on maturity.
Record the necessary Journal entries in the books of Vibha.

In the Books of Vibha
Journal Entries
DateParticularsLFAmt.(Dr)Amt.(Cr)
$$2011$$
Jan $$1$$Sudha                              Dr
To Sales A/c
(Being goods sold to Sudha)
$$18,000$$$$18,000$$
Jan $$1$$Bills Receivable A/c                 Dr
To Sudha
(Being acceptance received)
$$18,000$$$$18,000$$
Jan $$1$$Geeta                         Dr
To Bills Receivable A/c
(Being acceptance of Sudha endorsed to Geeta)
$$18,000$$$$18,000$$
Feb $$27$$Sudha                     Dr
To Geeta
(Being acceptance of Sudha cancelled before maturity)
$$18,000$$$$18,000$$
Feb $$27$$Geeta                           Dr
To Cash A/c
(Being payment made to Geeta and bill received)
$$18,000$$$$18,000$$
Feb $$27$$Bills Receivable A/c             Dr
To Sudha
To Interest A/c
(Being new acceptance received with interest Rs. $$200$$)
$$18,200$$$$18,000$$
$$200$$
Mar $$2$$Cash A/c               Dr
To Sudha
(Being payment received on maturity)
$$18,200$$$$18,200$$



Kapil purchased goods for Rs. $$21,000$$ from Gaurav on $$1.2.2011$$ and accepted a bill of exchange drawn by Gaurav for the same amount. The bill was payable after one month. On $$25.2.2008$$ 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 Rs. $$100$$ as noting charges.
Record the necessary Journal entries for the above transactions is the books of Kapil and Gaurav.

In the Books of Gaurav
Journal Entries
DateParticularsLFAmt.(Dr)Amt.(Cr)
$$2011$$
Feb $$1$$Kapil                         Dr
To Sales A/c
(Being goods sold to Kapil)
$$21,000$$$$21,000$$
Feb $$1$$Bills Receivable A/c                Dr
To Kapil
(Being acceptance received from Kapil)
$$21,000$$$$21,000$$
Feb $$5$$Bill Sent for Collection A/c               Dr
To Bills Receivable A/c
(Being bill sent to the bank for collection)
$$21,000$$$$21,000$$
Mar $$4$$Kapil                   Dr
To Bill Sent for Collection A/c
To Bank A/c
(Being bill dishonoured on due date and noting charges paid)

$$21,100$$$$21,000$$
$$100$$

In the Books of Kapil
Journal Entries
DateParticularsLFAmt.(Dr)Amt.(Cr)
$$2011$$
Feb $$1$$Purchase A/c                 Dr
To Gaurav
(Being goods purchased from Gaurav on credit)
$$21,000$$$$21,000$$
Feb $$1$$Gaurav                        Dr
To Bills Payable A/c
(Being acceptance given)
$$21,000$$$$21,000$$
Mar $$4$$Bills Payable A/c               Dr
Noting Charges A/c                Dr
To Gaurav
(Being bill discharged and noting charges due)
$$21,000$$
$$100$$
$$21,100$$



Raja made sales goods worth Rs. 40,000 to Pradhan and received a part payment of Rs. 10,On the same date, Raju drew on Pradhan a three month's bill for Rs. 30,000, received the acceptance on the bill and sent the bill to the bank for collection immediately.
However, on the due date, the bill was dishonoured due to Pradhan's insolvency and only 50% of the amount due could be recovered from his private estate as the first and final dividend.
Give Journal Entries Pradhan's Account in the books Raja.

                                               Journal Entries In the books of Raja 
 Date/ SR. No.Particular LF
 Debit (Rs.)  Credit (Rs.)
 1Cash a/c dr
Pradhan a/c dr
         To sales a/c
(Being goods sold on cash and credit)		  10000
30000		 

40000
 2Bills receivable a/c dr
          To Bills receivable a/c dr
(Being Bill sent for bank for collection)		  30000 
30000
 3Bill sent for collection a/c dr
          To Bills receivable a/c
(Being Bill sent for bank for collection)		  30000
30000 
 4 Pradhans a/c dr
           To Bill sent for collection a/c
(Being bill cancelled on insolvency)		  30000 
30000
 5Cash debts a/c dr
Bad debts a/c dr
            To Pradhans a/c
(Being 50% cash recevied on prabhans in insolvency)		 15000
15000		 

30000
    160000 160000
                                                                  In the Books of Raja
                                                     Pradhans A/c
 Particulars Rs. Particulars Rs.
 To sales a/c 30000 By Bills receivable a/c 30000
 To Bill sent for Collection a/c 30000 By cash a/c 15000
   By Bad debts a/c 15000
 Total 60000 Total 60000
                                                            


Class 11 Commerce Accountancy Extra Questions