# Practical Problem 10

 Practical problem | Q 10 | Page 307Sagar drawn an after sight bill on 21st Nov. 2019 for ` 21,000 at 3 months on Prasad. The bill is discounted by Sagar at 8 % p. a. with his bank. On maturity, Prasad finds himself unable to make payment of the bill and requests Sagar to renew it. Sagar accepts the request and draws a new bill at one month for Rs 21,750 including interest which was duly accepted by Prasad. Sagar deposits the bill into bank for the collection. Prasad honours the bill on the due date and Bank charges Rs 250 as Bank Charges. Pass necessary Journal Entries in the Books of Sagar and prepare Sagar’s account in the books of Prasad.

#### Solution:

 Journal Entries In the books of  Sagar Date Particular Amount Amount 2019 Nov-21 Bill Receivable A/c ………………………………………………………………………Dr 21,000 To Prasad A/c 21,000 (Being bill Drawn and Acceptance Received) Nov-21 Bank A/c ………………………………………………………………………………………Dr 20580 Discount A/c ………………………………………………………………………………..Dr 420 To Bill receivable A/c 21,000 (Being bill Discounted with Bank) Feb-24 Prasad A/c ……………………………………………………………………………………Dr 21000 To Bank A/c 21,000 (Being Bill Cancelled) Feb-24 Prasad A/c ……………………………………………………………………………………Dr 750 To Interest A/c 750 (Being Interest charged on balance due) Feb-24 New Bill Receivable A/c …………………………………………………………….Dr 21,750 To Prasad A/c 21,750 (Being New bill drawn and Acceptance received) Feb-24 Bank for Collection A/c ……………………………………………………………..Dr 21750 To Bill Receivable A/c 21,750 (Being new bill send for collection to bank) Mar-24 Bank A/c …………………………………………………………………………………….Dr 21500 Bank Charges A/c ………………………………………………………………………Dr 250 To Bank For Collection 21,750 (Being Bill send to bank for collection honored and bank charges deducted) Total 1,29,000 1,29,000

 In The Books of Prasad Sagar’s A/c Date Particular Amt Date Particular Amt Nov-21 To Bill Payable 21000 Nov-21 By Balance b/d 21000 Feb-24 To New Bill Payable 21750 Feb-24 By Bill Payable 21000 Feb-24 By Interest 750 42,750 42,750