Practical Problem 06

Practical problem | Q 6 | Page 306

Sangeeta accepted a bill for ` 18,000 drawn by Geeta at 3 months. Geeta discounted the bill for Rs 17,400.

Before the due date Sangeeta approached Geeta for renewal of the bill. Geeta agreed on the condition that

Sangeeta should pay Rs 6,000 immediately and for the balance she should accept a new bill for 4 months

along with interest Rs 550. The arrangements were carried through. But on the due date of new bill

Sangeeta became insolvent and 35 paise in a rupee could be recovered from her estate.

Give Journal Entries in the Books of Sangeeta and prepare Sangeeta’s account in the books of Geeta.

Journal Entries In the books of Sangeeta
Date	Particular	L.F	Amount	Amount
1	Geeta’s A/c………………………………………………………………………………….Dr		18,000
	To Bills Payable A/c			18,000
	(Being Our acceptance is given)

2	Bills Payable A/c……………………………………………………………………………………Dr		18,000
	To Geeta’s A/c			18,000
	(Being Bill Cancelled on our request)

3	Interest A/c……………………………………………………………………………………Dr		550
	To Geeta’s A/c			550
	(Being Interest due on balance amount to be paid)

4	Geeta’s A/c ……………………………………………………………………..Dr		6,000
	To Bank A/c			6,000
	(Being Part Payment Made)

5	Geeta’s A/c……………………………………………………………………….Dr		12,550
	To New Bills Payable A/c			12,550
	(Being acceptance given for balance amount along with interest)

6	New Bills Payable A/c ………………………….…………………………..Dr		12,550
	To Geeta’s A/c			12,550
	( Being New bill Dishonored)

7	Geeta’s A/c ………………………………………………………………………..Dr		12,550
	To Cash A/c			4,393
	To Deficiency A/c			8157
	(Being 35% of the amt due paid and balance credited to deficiency A/c)
	Total		80,200	80,200