Practical Problem 10
Practical problem | Q 10 | Page 307 Sagar 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 | |||||