Vimal purchased goods Rs 25,000 from Kamal on Jan 15, 2006 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.

 

 

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

 

Books of Kamal

Journal

Date

Particulars

L.F.

Debit Amount Rs

Credit Amount Rs

2006

Jan.15

Vimal

Dr.

25,000

 

 

To Sales A/c

25,000

(Goods sold to Vimal)

 

 

 

Jan.15

Bills Receivable A/c

Dr.

25,000

 

 

To Vimal

25,000

(Vimal's acceptance reccived)

 

 

 

Mar.18

Vimal

Dr.

25,000

 

To Bills Receivable A/c

25,000

(Vimal acceptance dishonoured)

 

 

 

 

 

 

 

Books of Vimal

Journal

Date

Particulars

L.F.

Debit

Amount

Rs

Credit

Amount

Rs

2006

 

 

 

Jan.15

Purchases A/c

Dr.

25,000

 

 

 

To Kamal

25,000

 

(Goods bought from Kamal)

 

 

 

 

Jan.15

Kamal

Dr.

25,000

 

 

 

To Bills Payable A/c

25,000

 

(Bill drawn by Kamal accepted)

 

 

 

 

Mar.18

Bills Payable A/c

Dr.

25,000

 

 

To Kamal

25,000

(Bill drawn by Kamal dishonoured)

 

 

 

 

 

 

 

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

 

Books of Kamal

Journal

Date

Particulars

L.F.

Debit Amount Rs

Credit Amount Rs

2006

 

 

 

Jan.15

Vimal

Dr.

25,000

 

 

 

To Sales A/c

25,000

 

(Goods sold to Vimal)

 

 

 

 

Jan.15

Bills Receivable A/c

Dr.

25,000

 

 

 

To Vimal

25,000

 

(Vimal's acceptance received)

 

 

 

 

Jan.15

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)

 

 

 

Mar.18

Vimal

Dr.

25,000

 

To Bank A/c

25,000

(Vimal's aceptance dishonoured)

 

 

 

 

 

 

 

Books of Vimal

Journal

Date

Particulars

L.F.

Debit Amount Rs

Credit Amount Rs

2006

 

 

 

Jan.15

Purchases A/c

Dr.

25,000

 

 

 

To Kamal

25,000

 

(Goods bought from Kamal)

 

 

 

 

Jan.15

Kamal

Dr.

25,000

 

 

 

To Bills Payable A/c

25,000

 

(Bill drawn by Kamal accepted)

 

 

 

 

Mar.18

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 Amount Rs

Credit Amount Rs

 

 

 

2006

 

 

 

Jan.15

Vimal

Dr.

25,000

 

 

 

To Sales A/c

25,000

 

(Goods sold to Vimal)

 

 

 

 

Jan.15

Bills Receivable A/c

Dr.

25,000

 

 

 

To Vimal

25,000

 

(Vimal's acceptence received)

 

 

 

 

Jan.15

Sharad

Dr.

25,000

 

 

To Bills Receivable A/c

25,000

 

(Vimal's acceptance endorsed to Sharad)

 

 

 

Mar.18

Vimal

Dr.

25,000

 

To Sharad

25,000

(Vimal's acceptance endorsed to Kamal dishonoured)

 

 

 

 

 

 

 

Books of Vimal

Journal

Date

Particulars

L.F.

Debit Amount Rs

Credit Amount Rs

2006

 

 

 

Jan.15

Purchases A/c

Dr.

25,000

 

 

 

To Kamal

25,000

 

(Goods bought from Kamal)

 

 

 

 

Jan.15

Kamal

Dr.

25,000

 

 

 

To Bills Payable A/c

25,000

 

(Bill drawn by Kamal accepted)

 

 

 

 

Mar.18

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 for collection

 

Books of Kamal

Journal

Date

Particulars

L.F.

Debit Amount Rs

Credit Amount Rs

2006

 

 

 

Jan.15

Vimal

Dr.

25,000

 

 

 

To Sales A/c

25,000

 

(Goods sold to Vimal)

 

 

 

 

Jan.15

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)

 

 

 

Mar.18

Vimal

Dr.

25,000

 

To Bill Sent for Collection

25,000

(Vimal's acceptance dishonoured)

 

 

 

 

 

 

 

Books of Vimal

Journal

Date

Particulars

L.F.

Debit Amount Rs

Credit Amount Rs

Case (iii)

 

 

 

2006

 

 

 

Jan.15

Purchases A/c

Dr.

25,000

 

 

 

To Kamal

25,000

 

(Goods bought from Kamal)

 

 

 

 

Jan.15

Kamal

Dr.

25,000

 

 

 

To Bills Payable A/c

25,000

 

(Bill drawn by Kamal accepted)

 

 

 

 

Mar.18

Bills Payable A/c

Dr.

25,000

 

 

To Kamal

25,000

(Bill drawn by Kamal dishonoured)

 

 

 

 

 

 

 

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