On 1st june 2003 A sold goods to B for Rs.1250 . B gave to Ahis acceptance payable one month after date. Before maturity B requests A to renew it , which A does adding Rs.10 to the new bill for interest. Make necessary journal entries to record these transactions in the books of both A and B.

In the Books of A

Journal

Date

Particulars

 

L.F.

Debit

Amount

Rs

Credit

Amount

Rs

2004

June 01

 

 

 

June 01

 

 

 

July 04

 

 

 

July 04

 

 

 

July 04

 

B

To Sales A/c

(Sold goods to B)

 

Bills Receivable A/c

To B

(B’s acceptance received)

 

B

To Bills Receivable A/c

(B’s acceptance cancelled)

 

B

To Interest A/c

(Interest due from B)

 

Bills Receivable A/c

To B

(B’s acceptance received)

 

Dr.

 

 

 

Dr.

 

 

 

Dr.

 

 

 

Dr.

 

 

 

Dr.

 

 

1,250

 

 

 

1,250

 

 

 

1,250

 

 

 

10

 

 

 

1,260

 

 

1,250

 

 

 

1,250

 

 

 

1,250

 

 

 

10

 

 

 

1,260

 

 

In the Books of B

Journal

Date

Particulars

 

L.F.

Debit

Amount

Rs

Credit

Amount

Rs

2004

June 01

 

 

 

June 01

 

 

 

July 04

 

 

 

July 04

 

 

 

July 04

 

Purchases A/c

To A

(Bought goods from A)

 

A

To Bills payable A/c

(Bill drawn by A, accepted)

 

Bills Payable A/c

To A

(Bill drawn by B cancelled)

 

Interest A/c

To A

(Interest due to A)

 

A

To Bill’s Payable A/c

(Bill drawn by A accepted)

 

Dr.

 

 

 

Dr.

 

 

 

Dr.

 

 

 

Dr.

 

 

 

Dr.

 

 

1,250

 

 

 

1,250

 

 

 

1,250

 

 

 

10

 

 

 

1,260

 

 

1,250

 

 

 

1,250

 

 

 

1,250

 

 

 

10

 

 

 

1,260

 

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