# Practical Problem 06

 Practical problem | Q 6 | Page 306Sangeeta 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.

#### Solutions:

 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
 In the Books Of Geeta Sangeeta’s Account Date Particular Amount Date Particular Amount 1 To Bal b/d 18,000 2 By Bill Receivable A/c 18,000 3 To Bank A/c 18,000 5 By Bank A/c 6,000 4 To Interest A/c 550 6 By New Bill Receivable A/c 12,550 7 To New bill Receivable A/c 12,550 8 By Cash A/c 4,393 By Bad Debts 8,157 49,100 49,100