Class 11-commerce NCERT Solutions Accountancy Part I Chapter 8: Bills of Exchange

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Bills of Exchange Exercise 310

Solution SA 1

Cheques and Bills of exchange are the commonly used negotiable instruments.

Solution SA 2

Bills of Exchange	Promissory Note
A bill of exchange is an instrument in writing containing an unconditional order, signed by the maker directing a certain person to pay a certain amount of money only to, or to the order of a certain person or to the bearer of the instrument.	A promissory note is an instrument in writing containing an unconditional undertaking signed by the maker to pay a certain sum of money only to, or to the order of a certain person or to the bearer of the instrument.
There are three parties involved, namely drawer, drawee and payee.	There are two parties involved, namely maker and payee.

Solution SA 3

Essential features of bills of exchange are as follows:

A bill of exchange is a written order to make payment
It is an unconditional order to make payment by a person i.e. drawee
The amount of bill of exchange and the date of payment are certain
It is signed by the drawer of the bill
It is accepted by the drawee by signing on it
The amount specified in the bill of exchange is payable either on demand or on the expiry of a fixed period
The amount specified in the bill is payable either to a certain person or to his order or to the bearer of the bill
It is stamped as per legal requirements

Solution SA 4

There are three parties in a bill of exchange:

Drawer is the person who makes the bill of exchange. She/he is a person who has granted credit to the person on whom the bill of exchange is drawn. The drawer is entitled to receive money from the drawee (acceptor).
Drawee is the person on whom the bill of exchange is drawn for acceptance and to whom credit has been granted by the drawer. He/she is liable to pay money to the creditor/drawer.
Payee is the person who receives the payment from the drawee. Usually the drawer and the payee are the same person.

Solution SA 5

The date calculated after adding 3 days of grace to the due date of a bill is called the date of maturity of a bill. It is to be noted that when a bill is to be payable on demand/at sight, then days of grace is not applicable. When the period of a bill is mentioned in days, the maturity of bill is calculated in days. Similarly, when the period of a bill is mentioned in months, the maturity of bill is calculated in months. In certain cases, when the maturity date of any bill falls on a public holiday, then the maturity date of the bill will be the previous business day.

Solution SA 6

When the drawee of the bill fails to make the payment on the maturity date of the bill, then the bill is said to have been dishonoured. Hence, liability of the acceptor is restored. Entries made for recording dishonour of the bill of exchange are as follows:

In the books of drawer

Drawee's A/c	Dr.
To Bills Receivable A/c
(Being bill dishonoured)

In the books of drawee

Bills Payable A/c	Dr.
To Drawer's A/c
(Being bill dishonoured)

Solution SA 7

There are two parties to a promissory note:

Maker- The person who makes the note and undertakes to pay the amount.
Payee- The person who receives the payment.

Solution SA 8

A bill of exchange is a written instrument which contains an unconditional order directing a person to pay a certain amount on an agreed date. In other words, it is drawn by the creditor on her/his debtors to make a payment of a certain amount on the mentioned date. Such a bill comes into existence after the consent of both the parties. A bill cannot come into existence without the acceptance of a debtor. Hence, the debtor of the bill has to accept the terms of the bill, sign the same and make it a legal document.

Solution SA 9

When the drawee of the bill fails to make the payment on the maturity date of the bill, then the bill is said to have been dishonoured. To have a legal proof of the dishonour, the bill gets noted by the notary public who is approved by the central/state government. The notary public charges fees called the noting charges for noting and protesting the bill of exchange of its dishonour.

Solution SA 10

When the drawee does not have enough funds to make the payment, he may approach the drawer and ask for an extension of time for the payment. If the drawer agrees, then a new bill is drawn which is known as renewal of bill. The new bill may include interest for the extended period.

Solution SA 11

Serial Number of Bill

Date Received

Date of Bill

Received From Whom

Drawer

Acceptor

Where payable

Term

Due date

Ledger Folio

Amount

Cash Book Folio

Remarks

Solution SA 12

Serial Number of Bill

Date of Bill

Given To Whom

Drawer

Payee

Payable Where

Term of Bill

Due Date

Ledger Folio

Amount Paid

Date

Cash Book Folio

Remarks

Solution SA 13

When the drawee of the bill pays off the amount of the bill before the maturity of the bill it is called retirement of the bill. Holder of the bill may give discount for such earlier payment which is called as 'rebate'.

Entry in the books of the holder of the bill

Cash A/c	Dr.
Rebate A/c	Dr.
To Bills Receivable A/c
(Being bill amount received before maturity and rebate allowed for retirement of the bill)

Entry in the books of the acceptor (drawee) of the bill

Bills Payable A/c	Dr.
To Cash A/c
To Rebate A/c
(Being bill paid and rebate received on retirement of the bill)

Solution SA 14

If the drawee wishes to pay the bill before the due date of the bill to the holder and the holder accepts such request, then due to the early payment, the holder may give some discount to the drawee. Such a discount is termed as rebate.

Solution SA 15

Performa of a Bill of exchange is given below.

Solution LA 1

According to Negotiable Instrument Act, 1981, "A bill of exchange is defined as an instrument in writing, containing an unconditional order, signed by the maker, directing a certain person to pay a certain sum of money only to, or to the order of, a certain person or to the bearer of the instrument."

As the definition mentions the bill is an unconditional order to pay i.e. no conditions should be applicable with respect to the payment and the drawee of the bill is obliged to pay the maker of the bill. This is one of the main features of a bill of exchange. All the conditions with respect to the bill, for example; the amount, the date of payment, the parties involved needs to be specified with clarity.

Solution LA 2

On the maturity of the bill, when the acceptor of the bill fails to make the payment, it is said that the bill is dishonoured. This restores the liability of the acceptor.

Entry in the books of drawer:

Drawee A/c	Dr.
-----------To Bills Receivable A/c
(Being bill dishonoured)

Entry in the books of drawee:

Bills Payable A/c	Dr.
-----------To Drawer A/c
(Being bill dishonoured)

Noting charges is the fee paid to the notary public for noting and protesting the bill of exchange of its dishonour.

Effect of Noting charges in the books of the drawer:

Drawee A/c	Dr.
-----------To Bills Receivable A/c
-----------To Cash A/c (Noting charges)
(Being bill dishonoured and Noting charges paid)

In the books of drawee:

Bills Payable A/c	Dr.
Noting charges A/c	Dr.
-----------To Drawer A/c
(Being bill dishonoured and Noting charges due)

Solution LA 3

The procedure to calculate the date of maturity of a bill of exchange is given below.

Determine the date on which the bill will be due.
Add three days of grace to the due date of the bill. It is standard process to add days of grace.
The date obtained after adding the three days to the due date is called the maturity date of the bill.

However, the application of the days of grace depend on the following situations:

Days of grace are not applicable when a bill is payable 'at sight' or on demand.
When the period of the bill is mentioned in months, the calculation of the maturity date will be in the terms of calendar month.
When the period of the bill is mentioned in days, the calculation of the maturity date is also calculated in days including the date of payment but excluding the date of transaction.
If the bill matures on a national holiday or Sunday, then the preceding business day becomes the maturity date of the bill.
For example, if the maturity date of a bill is calculated as on 15th August, 2015 then the preceding day that is 14th August, 2015 will be considered as the maturity date.
If the maturity day happens to be an emergency holiday declared under the Negotiable Instruments Act, 1881, then the next working day is to be considered as the maturity date.

Solution LA 4

Bills of Exchange	Promissory Note
It is an order to pay.	It is a promise to pay.
There are three parties involved, drawer, acceptor and payee.	There are two parties involved, maker and payee.
It is drawn by the creditor.	It is drawn by the debtors.
It needs acceptance by the drawee.	Acceptance is not required.
Drawer and payee may be the same.	Promissor cannot be the payee.
In case of dishonour of the bill, the bill may get noted.	Noting is not necessary.

Solution LA 5

As the holder of the bill provides the rebate, it is a loss for the holder of the bill and hence it is debited in the books of the holder when payment is received.

Cash A/c	Dr.
Rebate A/c	Dr.
---------To Bills Receivable A/c
(Being payment received and rebate allowed for early payment)

The rebate is a gain for the drawee; so, it is credited in the books of the drawee.

Bills Payable A/c	Dr.
To Cash A/c
To Rebate A/c
(Being bill paid before the due date and rebate received for early payment)

Solution LA 6

Bills receivable book is a special purpose book that is maintained to keep records of bills received from the debtors. It contains details such as acceptor's name, date of bill, due date and amount. for future references.

Benefits of maintaining the bill receivable book:

Source of information: The general information related to the each of the bills i.e. the amount, due date and name of the drawee are recorded at one place and hence are easily accessible.
Avoid fraud: As the details of all the bills are recorded at one place, possibility of fraud is reduced.
Responsibility: The person who maintains the bills receivable book will also be responsible for any errors or omissions. Therefore, higher degree of accountability and responsibility exists. Also, if any error is detected, then it can be fixed quickly.
Time saving: Recording of bills receivable through the bills receivable book takes lesser time than that of journal entry.

Solution LA 7

A bills payable book is a special purpose book, maintained to keep records of acceptance of bills, given to the creditors. It contains details of the amount, date of bill, due date and name of the drawer to whom acceptance is given for future references.

Benefits of Maintaining Bills Payable Book

Source of information: The general information related to the each of the bills i.e. the amount, due date and name of the drawee are recorded at one place and hence are easily accessible.
Avoid fraud: As the details of all the bills are recorded at one place, possibility of fraud is reduced.
Time saving: Recording of bills receivable through the bills receivable book takes lesser time than that of journal entry.
Responsibility: As the transactions are recorded by the same person errors if any can be easily detected and rectified. This leads to enhancement of responsibility and accountability of the accountant.

Solution NUM 1

Book of Rao Journal Entries
Date	Particulars		L.F.	Dr. Rs.	Cr. Rs.
2016
Jan 01	Reddy A/c	Dr.		10,000
	----------To Sales A/c				10,000
	(Being goods sold to Reddy)

Jan 01	Cash A/c	Dr.		5,000
	----------To Reddy A/c				5,000
	(Being cash received from Reddy)

Jan 01	Bills Receivable A/c	Dr.		5,000
	----------To Reddy A/c				5,000
	(Being bill received and accepted from Reddy for 30 days)

Feb 03	Cash A/c	Dr.		5,000
	----------To Bills Receivable A/c				5,000
	(Being Reddy's acceptance met on due date)

Books of Reddy Rao's Account
Dr.							Cr.
Date	Particulars	J.F.	Amount Rs.	Date	Particulars	J.F.	Amount Rs.
2016				2016
Jan 01	To Cash A/c		5,000	Jan01	By Purchases A/c		10,000
Jan 01	To Bills Payable A/c		5,000

			10,000				10,000

Bills of Exchange Exercise 311

Solution NUM 2

Book of Parvati Journal
Date	Particulars		L.F.	Dr. Rs.	Cr. Rs.
2016
Jan 01	Shankar A/c	Dr.		8,000
	----------To Sales A/c				8,000
	(Being goods sold to Shankar)

Jan 01	Bills Receivable A/c	Dr.		8,000
	----------To Shankar A/c				8,000
	(Being promissory note received from Shankar for three months)

Apr 05	Cash A/c	Dr.		8,000
	----------To Bills Receivable A/c				8,000
	(Being cash received for promissory note one day after the maturity date on account of holiday declared by govt.)

Book of Shankar Journal
Date	Particulars		L.F.	Dr. Rs.	Cr. Rs.
2016
Jan 01	Purchases A/c	Dr.		8,000
	----------To Parvati A/c				8,000
	(Being goods purchased from Parvati)

Jan 01	Parvati A/c	Dr.		8,000
	----------To Bills Payable A/c				8,000
	(Being promissory note for three months sent to Parvati)

Apr 5	Bills Payable A/c	Dr.		8,000
	----------To Cash A/c				8,000
	(Being cash paid on maturity promissory note)

Solution NUM 3

Book of Vishal Journal
Date	Particulars		L.F.	Dr. Rs.	Cr. Rs.
2016
Jan 05	Manju A/c	Dr.		7,000
	----------To Sales A/c				7,000
	(Being goods sold to Manju)

Jan 05	Bills Receivable A/c	Dr.		7,000
	----------To Manju A/c				7,000
	(Being bill received with Manju's acceptance for two months)

Jan 05	Bank A/c	Dr.		6,860
	Discount A/c	Dr.		140	7,000
	----------To Bills Receivable A/c
	(Being bill receivable discounted with the bank @ 12 % p.a. for two months)

Note: On payment of the bill, no entry will be made.

Book of Manju Journal
Date	Particulars		L.F.	Dr. Rs.	Cr. Rs.
2016
Jan 05	Purchases A/c	Dr.		7,000
	----------To Vishal A/c				7,000
	(Being goods purchased from Vishal)

Jan 05	Vishal A/c	Dr.		7,000
	----------To Bills Payable A/c				7,000
	(Being bill accepted drawn by Vishal)

Mar08	Bills Payable A/c	Dr.		7,000
	----------To Bank A/c				7,000
	(Being amount of bill payable paid to bank on maturity)

Solution NUM 4

Book of Jimmi Journal
Date	Particulars		L.F.	Dr. Rs.	Cr. Rs.
2016
Feb 01	John A/c	Dr.		15,000
	----------To Sales A/c				15,000
	(Being goods sold to John)

Feb 01	Bank A/c	Dr.		5,000
	----------To John A/c				5,000
	(Being cheque received for Rs.5,000 from John)

Feb 01	Bills Receivable A/c	Dr.		10,000
	----------To John A/c				10,000
	(Being bill received from John for 40 days)

Mar 11	Bill Sent for Collection A/c	Dr.		10,000
	----------To Bills Receivable A/c				10,000
	(Being John's acceptance sent to bank for collection)

Mar 16	Bank A/c	Dr.		10,000
	----------To Bill Sent for Collection A/c				10,000
	(Being John's acceptance met on due date and bank received the payment)

Ledger John's Account
Dr.							Cr.
Date	Particulars	J.F.	Amount Rs.	Date	Particulars	J.F.	Amount Rs.
2016				2016
Feb 01	To Sales A/c		15,000	Feb 01	By Bank A/c		5,000
				Feb 01	By Bills Receivable A/c		10,000

			15,000				15,000

Book of John Journal
Date	Particulars		L.F.	Dr. Rs.	Cr. Rs.
2016
Feb 01	Purchases A/c	Dr.		15,000
	----------To Jimmi A/c				15,000
	(Being goods purchases from Jimmi)

Feb 01	Jimmi A/c	Dr.		5,000
	----------To Bank A/c				5,000
	(Being cheque paid to Jimmi)

Feb 01	Jimmi A/c	Dr.		10,000
	----------To Bills Payable A/c				10,000
	(Being bill draw accepted for 40 days)

Mar 16	Bills Payable A/c	Dr.		10,000
	----------To Bank A/c				10,000
	(Being payment made on maturity of the bill to bank)

Ledger Jimmi's Account
Dr.							Cr.
Date	Particulars	J.F.	Amount Rs.	Date	Particulars	J.F.	Amount Rs.
2016				2016
Feb 01	To Bank A/c		5,000	Feb 01	By Purchases A/c		15,000
Feb 01	To Bills Payable A/c		10,000

			15,000				15,000

Solution NUM 5

Books of Kartar Journal Entries
Date	Particulars			L.F.	Dr. Rs.	Cr. Rs.
2015
Jan 15	Bhagwan		Dr.		30,000
	----------To Sales A/c					30,000
	(Being goods sold to Bhagwan)

Jan 15	Bills Receivable A/c		Dr.		30,000
	----------To Bhagwan A/c					30,000
	(Being three bills of Rs.10,000 each, received from Bhagwan the first bill for one month, second bill for two months and third bill for three months)

Jan 15	Ratna A/c	Dr.			10,000
	----------To Bills Receivable A/c					10,000
	(Being the second bill endorsed to Ratna)

Jan 15	Bank A/c	Dr.			9,850
	Discount A/c	Dr.			150
	----------To Bills Receivable A/c					10,000
	(Being bill discounted at 6% p.a.)

Feb 18	Cash A/c	Dr.			10,000
	----------To Bills Receivable A/c					10,000
	(Being the first bill met by Bhagwan, on due date)

Bhagwan's Account
Dr.							Cr.
Date	Particulars	J.F.	Amount Rs.	Date	Particulars	J.F.	Amount Rs.
2015				2015
Jan 15	To Sales A/c		30,000	Jan 15	By Bills Receivable A/c		30,000

			30,000				30,000

Ratna's Account
Dr.							Cr.
Date	Particulars	J.F.	Amount Rs.	Date	Particulars	J.F.	Amount Rs.
2015				2015
Jan 15	To Bills Receivable A/c		10,000	Jan 31	By Balance c/d		10,000

			10,000				10,000

Bills Receivable Account
Dr.							Cr.
Date	Particulars	J.F.	Amount Rs.	Date	Particulars	J.F.	Amount Rs.
2015				2015
Jan 15	To Bhagwan A/c		30,000	Jan 15	By Ratna A/c		10,000
				Jan 15	By Bank A/c		9,850
				Jan 15	By Discount A/c		150
				Jan 15	By Cash A/c		10,000

			30,000				30,000

Cash Account
Dr.							Cr.
Date	Particulars	J.F.	Amount Rs.	Date	Particulars	J.F.	Amount Rs.
2015				2015
Feb 18	To Bills Receivable A/c		10,000	Feb 28	By Balance c/d		10,000

			10,000				10,000

Bank's Account
Dr.							Cr.
Date	Particulars	J.F.	Amount Rs.	Date	Particulars	J.F.	Amount Rs.
2015				2015
Jan 15	To Bills Receivable A/c		9,850	Jan 31	By Balance c/d		9,850

			9,850				9,850

Books of Bhagwan Journal Entries
Date	Particulars		L.F.	Dr. Rs.	Cr. Rs.
2015
Jan 15	Purchases A/c	Dr.		30,000
	To Kartar A/c				30,000
	(Being good purchased from Kartar on Cr.)

Jan 15	Kartar A/c	Dr.		30,000
	To Bills Payable A/c				30,000
	(Being three bill Rs.10,000 each drawn by Kartar the first bill for one month, the second bill for two months and the third bill for three months, accepted and returned them to Kartar)

Feb 18	Bills Payable A/c	Dr.		10,000
	To Cash A/c				10,000
	(Being first was paid on due date)

Mar18	Bills Payable A/c	Dr.		10,000
	To Bank A/c				10,000
	(Being second bill was paid on due to Ratna)

Apr 18	Bills Payable A/c	Dr.		10,000
	To Bank A/c				10,000
	(Being third bill was paid on due to bank)

Kartar's Account
Dr.							Cr.
Date	Particulars	J.F.	Amount Rs.	Date	Particulars	J.F.	Amount Rs.
2015				2015
Jan 15	To Bills Payable A/c		30,000	Jan 15	By Purchases A/c		30,000

			30,000				30,000

Bills Payable Account
Dr.							Cr.
Date	Particulars	J.F.	Amount Rs.	Date	Particulars	J.F.	Amount Rs.
2015				2015
Feb 18	To Cash A/c		10,000	Jan 15	By Kartar A/c		30,000
Mar 18	To Bank A/c		10,000
Apr 18	To Bank A/c		10,000
			30,000				30,000

Cash Account
Dr.							Cr.
Date	Particulars	J.F.	Amount Rs.	Date	Particulars	J.F.	Amount Rs.
2015				2015
Feb28	To Balance c/d		10,000	Feb 18	By Bills Payable A/c		10,000

			10,000				10,000

Bank Account
Dr.							Cr.
Date	Particulars	J.F.	Amount Rs.	Date	Particulars	J.F.	Amount Rs.
2015				2015
Apr 31	To Balance c/d		20,000	Mar18	By Bills Payable A/c		10,000
				Apr18	By Bills Payable A/c		10,000

			20,000				20,000

Solution NUM 6

As per the provisions of Negotiable Instrument Act, when the maturity date of any bill falls on a public holiday then the maturity date of the bill will be the previous business day.

20 days after Jan 01, 2016 is 21st Jan, 2016. Adding 3 days of grace, we get the maturity date as 24th Jan, 2016. Previous business day is 23rd Jan, 2016.

Book of Arun Journal Entries
Date	Particulars		L.F.	Dr. Rs.	Cr. Rs.
2016
Jan 01	Sunil A/c	Dr.		30,000
	---------To Sales A/c				30,000
	(Being goods sold to Sunil)

Jan 01	Cash A/c	Dr.		14,700
	Discount Allowed A/c	Dr.		300
	---------To Sunil A/c				15,000
	(Being half of the amount due from Sunil was received and allowed him 2% cash discount)

Jan 01	Bills Receivable A/c	Dr.		15,000
	---------To Sunil A/c				15,000
	(Being promissory note received for balance amount due from Sunil)

Jan 23	Cash A/c	Dr.		15,000
	---------To Bills Receivable A/c				15,000
	(Being cash received from Sunil one day before the maturity date due to public holiday)

Book of Sunil Journal Entries
Date	Particulars		L.F.	Dr. Rs.	Cr. Rs.
2016
Jan01	Purchases A/c	Dr.		30,000
	---------To Arun A/c				30,000
	(Being goods purchased from Arun)

Jan 01	Arun A/c	Dr.		15,000
	---------To Cash A/c				14,700
	---------To Discount Received A/c				300
	(Being half amount due to Arun paid by cheque and 2% discount allowed by him)

Jan 01	Arun A/c	Dr.		15,000
	---------To Bills Payable A/c				15,000
	(Being promissory note issued in favour of Arun for twenty days)

Jan 23	Bills Payable A/c	Dr.		15,000
	---------To Cash A/c				15,000
	(Being promissory note met one day before the maturity day)

Solution NUM 7

Case i: When the bill was retained by Darshan till the date of its maturity

Books of Darshan Journal Entries
Date	Particulars		L.F.	Dr. Rs.	Cr. Rs.
2016
Jan 08	Varun A/c	Dr.		40,000
	---------To Sales A/c				40,000
	(Being goods sold to Varun)

Jan 08	Bills Receivable A/c	Dr.		40,000
	---------To Varun A/c				40,000
	(Being Varun's acceptance received)

Mar 11	Cash A/c	Dr.		40,000
	---------To Bills Receivable A/c				40,000
	(Being bill met on due date)
	Varun A/c

Book of Varun Journal Entries
Date	Particulars		L.F.	Dr. Rs.	Cr. Rs.
2016
Jan 08	Purchases A/c	Dr.		40,000
	---------To Darshan A/c				40,000
	(Being goods bought from Darshan)

Jan 08	Darshan A/c	Dr.		40,000
	To Bills Payable A/c				40,000
	(Being bill of two months accepted for Darshan)

Mar 11	Bills Payable A/c	Dr.		40,000
	To Cash A/c				40,000
	(Being Varun cleared his acceptance on the due date)

Case ii: When Darshan immediately discounted the bill @ 6% p.a. with his bank.

Book of Darshan Journal Entries
Date	Particulars		L.F.	Dr. Rs.	Cr. Rs.
2016
Jan 08	Varun A/c	Dr.		40,000
	---------To Sales A/c				40,000
	(Being goods sold to Varun)

Jan 08	Bills Receivable A/c	Dr.		40,000
	---------To Varun				40,000
	(Being B/R received from Varun for two months)

Jan08	Bank A/c	Dr.		39,600
	Discount A/c	Dr.		400
	---------To Bills Receivable A/c				40,000
	(Being bill discounted with the bank @ 6 % p.a.)

Book of Varun Journal Entries
Date	Particulars		L.F.	Dr. Rs.	Cr. Rs.
2016
Jan 08	Purchases A/c	Dr.		40,000
	---------To Darshan A/c				40,000
	(Being goods bought from Darshan)

Jan 08	Darshan A/c	Dr.		40,000
	---------To Bills Payable A/c				40,000
	(Being bill of two month accepted for darshan)

Mar 11	Bills Payable A/c	Dr.		40,000
	---------To Bank A/c				40,000
	(Being Varun cleared his acceptance on the due date)

Case iii: When the bill was endorsed immediately by Darshan in favour of his Cr. or Suresh.

Book of Darshan Journal Entries
Date	Particulars		L.F.	Dr. Rs.	Cr. Rs.
2016
Jan 08	Varun A/c	Dr.		40,000
	---------To Sales A/c				40,000
	(Being goods sold to Varun)

Jan 08	Bills Receivable A/c	Dr.		40,000
	---------To Varun A/c				40,000
	(Being Varun's acceptance received for two months)

Jan 08	Suresh A/c	Dr.		40,000
	---------To Bills Receivable A/c				40,000
	(Being Varun's acceptance endorsed in favour of Suresh)

Book of Varun Journal Entries
Date	Particulars		L.F.	Dr. Rs.	Cr. Rs.
2016
Jan 08	Purchases A/c	Dr.		40,000
	---------To Darshan A/c				40,000
	(Being goods bought from Darshan)

Jan 08	Darshan A/c	Dr.		40,000
	---------To bills payable A/c				40,000
	(Being bill drawn by Darshan accepted for two months)

Mar 11	Bills Payable A/c	Dr.		40,000
	---------To Cash A/c				40,000
	(Being bills paid to holder of bill)

Case iv: When three days before its maturity, the bill was sent by Darshan to his bank for collection.

Book of Darshan Journal Entries
Date	Particulars		L.F.	Dr. Rs.	Cr. Rs.
2016
Jan 08	Varun A/c	Dr.		40,000
	---------To Sale A/c				40,000
	(Being goods sold to Varun)

Jan 08	Bills Receivable A/c	Dr.		40,000
	---------To Varun A/c				40,000
	(Being Varun's acceptance received two months)

Mar 08	Bill sent for Collection A/c	Dr.		40,000
	---------To Bills Receivable A/c				40,000
	(Being bills send for collection send to the bank)

Mar 11	Bank A/c	Dr.		40,000
	---------To Bill sent for collection				40,000
	(Being bill sent for collection realised)

Book of Varun Journal Entries
Date	Particulars		L.F.	Dr. Rs.	Cr. Rs.
2016
Jan 08	Purchases A/c	Dr.		40,000
	---------To Darshan A/c				40,000
	(Being goods bought from Darshan)

Jan 08	Darshan A/c	Dr.		40,000
	---------To Bills Payable A/c				40,000
	(Being bill drawn by Darshan accepted for two months)

Mar 11	Bills Payable A/c	Dr.		40,000
	---------To Bank A/c				40,000
	(Being bill paid to the bank)

Bills of Exchange Exercise 312

Solution NUM 8

Book of Bansal Traders Journal Entries
Date	Particulars		L.F.	Dr. Rs.	Cr. Rs.
2016
Dec 21	Mohan Traders A/c	Dr.		900
	---------To Sales A/c				900
	(Being goods sold to Mohan Traders list price Rs.1,000 at 10% trade discount)

Dec 21	Bills Receivable A/c	Dr.		900
	---------To Mohan Traders A/c				900
	(Being promissory note received from Mohan Traders payable after 30 days)

Dec 26	Mohan Traders A/c	Dr.		1,080
	---------To Sales A/c				1,080
	(Being goods sold to Mohan Traders list price Rs.1,200 at 10% trade discount)

Dec 26	Bills Receivable A/c	Dr.		1,080
	---------To Mohan Traders A/c				1,080
	(Being promissory note received from Mohan Traders)

Dec 26	Bank A/c	Dr.		1,069
	Discount A/c	Dr.		11
	---------To Bills Receivable A/c				1,080
	(Being promissory note discounted from the bank)

Dec 28	Mohan Traders A/c	Dr.		1,800
	---------To Sales A/c				1,800
	(Being sold to Mohan Traders list price Rs.2,000 at 10% trade discount)

Dec 28	Bills Receivable A/c	Dr.		1,800
	--------To Mohan Traders A/c				1,800
	(Being promissory note received from Mohan Traders)

Dec 28	Dream Soaps A/c	Dr.		1,900
	--------To Bills Receivable A/c				1,800
	--------To Discount Received A/c				100
	(Being promissory note of Rs.1,800 send to Dream Soap in full settlement of amount due to him)

Dec31	Mohan Traders A/c	Dr.		4,500
	---------To Sales A/c				4,500
	(Being goods sold to Mohan trade list price Rs.5,000 at 10% trade discount)

Dec 31	Bills Receivable A/c	Dr.		4,500
	---------To Mohan Traders A/c				4,500
	(Being promissory note received from Mohan Traders for 30 days)
2017
Jan 23	Cash A/c	Dr.		900
	---------To Bills Receivable A/c				900
	(Being promissory note issued on Dec. 21, 2005 was met on maturity)

Jan 25	Bill Sent for Collection A/c	Dr.		4,500
	---------To Bills Receivable A/c				4,500
	(Being promissory note issued on Dec. 31, 2005 send for collection to bank)

Feb 02	Bank A/c	Dr.		4,500
	---------To Bill Sent for Collection A/c				4,500
	(Being bank got payment of bill send for collection on due date)

In the books of Bansal Traders Mohan Trader's Account
Dr.							Cr.
Date	Particulars	J.F.	Amount Rs.	Date	Particulars	J.F.	Amount Rs.
2016				2016
Dec 21	To Sales A/c		900	Dec 21	By Bills Receivable A/c		900
Dec 26	To Sales A/c		1,080	Dec 26	By Bills Receivable A/c		1,080
Dec 28	To Sales A/c		1,800	Dec 28	By Bills Receivable A/c		1,800
Dec 31	To Sales A/c		4,500	Dec 31	By Bills Receivable A/c		4,500
			8,280				8,280

Books of Mohan Trader's Journal Entries
Date	Particulars		L.F.	Dr. Rs.	Cr. Rs.
2016
Dec 21	Purchases A/c	Dr.		900
	---------To Bansal Traders A/c				900
	(Being goods bought Bansal Trader's list price Rs.1,000 at 10% trade discount)

Dec 21	Bansal Traders A/c	Dr.		900
	---------To Bills Payable A/c				900
	(Being promissory note issued to Bansal Traders)

Dec 26	Purchases A/c	Dr.		1,080
	---------To Bansal Traders A/c				1,080
	(Being goods bought from Bansal Traders list price Rs.1,200 at10% trade discount)

Dec 26	Bansal Traders A/c	Dr.		1,080
	---------To Bills payable A/c				1,080
	(Being promissory note issued to Bansal Traders)

Dec 28	Purchases A/c	Dr.		1,800
	---------To Bansal Traders				1,800
	(Being goods bought from Bansal Traders list price Rs.2,000 at 10% trade discount)

Dec 28	Bansal Traders A/c	Dr.		1,800
	---------To Bills Payable A/c				1,800
	(Being promissory note issued to Bansal Traders)

Dec 31	Purchases A/c	Dr.		4,500
	---------To Bansal Traders A/c				4,500
	(Being goods bought from Bansal Traders of list price Rs.5,000 at 10% trade discount)

Dec 31	Bansal Traders A/c	Dr.		4,500
	---------To Bills Payable A/c				4,500
	(Being promissory note issued to Bansal Traders)
2017
Jan 23	Bills Payable A/c	Dr.		900
	---------To Cash A/c				900
	(Being the first note discharged on its due date)

Jan 28	Bill Payable A/c	Dr.		1,080
	---------To Bank A/c				1,080
	(Being the second promissory note discharged on its due date)

Jan 30	Bills Payable A/c	Dr.		1,800
	---------To Cash A/c				1,800
	(Being the third promissory discharged by paying Rs.1,800 to dream soaps)

Feb 02	Bills Payable A/c	Dr.		4,500
	---------To Bank A/c				4,500
	(Being the fourth promissory note discharged by paid Rs. 4,500 to bank)

In the book of Mohan Traders Bansal Trader's Account
Dr.							Cr.
Date	Particulars	J.F.	Amount Rs.	Date	Particulars	J.F.	Amount Rs.
2016				2016
Dec 21	To Bills Payable A/c		900	Dec 21	By Purchases A/c		900
Dec 26	To Bills Payable A/c		1,080	Dec 26	By Purchases A/c		1,080
Dec 28	To Bills Payable A/c		1,800	Dec 28	By Purchases A/c		1,800
Dec 31	To Bills Payable A/c		4,500	Dec 31	By Purchases A/c		4,500

			8,280				8,280

Solution NUM 9

Case i: When the bill was retained by Ravinderan with him till the date of its maturity

Book of Ravinderan Journal Entries
Date	Particulars		L.F.	Dr. Rs.	Cr. Rs.
2016
Feb 01	Narayanan A/c	Dr.		25,000
	---------To Sales A/c				25,000
	(Being goods sold to Narayanan)

Feb 01	Bills Receivable A/c	Dr.		25,000
	---------To Narayanan A/c				25,000
	(Being Narayanan's acceptance received for 30 days)

Mar 06	Narayanan A/c	Dr.		25,000
	---------To Bills Receivable A/c				25,000
	(Being Narayanan failed to meet his acceptance and bill dishonoured)

Book of Narayanan Journal
Date	Particulars		L.F.	Dr. Rs.	Cr. Rs.
2016
Feb 01	Purchases A/c	Dr.		25,000
	---------To Ravinderan A/c				25,000
	(Being goods bought from Ravinderan)

Feb 01	Ravinderan A/c	Dr.		25,000
	---------To Bills Payable A/c				25,000
	(Being Ravinderan's bill accepted)

Mar 05	Bills Payable A/c	Dr.		25,000
	------To Ravinderan A/c				25,000
	(Being bill dishonoured on maturity)

Case ii: When the bill was discounted by Ravinderan immediately with his bank @ 6% p.a.

Book of Ravinderan Journal
Date	Particulars		L.F.	Dr. Rs.	Cr. Rs.
2016
Feb 01	Narayanan A/c	Dr.		25,000
	---------To Sales A/c				25,000
	(Being goods sold to Narayanan)

Feb 01	Bills Receivable A/c	Dr.		25,000
	---------To Narayanan A/c				25,000
	(Being Narayanan's acceptance received)

Feb 01	Bank A/c	Dr.		24,877
	Discounting Charges A/c	Dr.		123
	---------To Bills Receivable A/c				25,000
	(Being Narayanan's acceptance got discounted with bank @ 6% p.a for 30 days)

Mar 06	Narayanan A/c	Dr.		25,000
	---------To Bank A/c				25,000
	(Being Narayanan's acceptance dishonoured)

Book of Narayanan Journal
Date	Particulars		L.F.	Dr. Rs.	Cr. Rs.
2016
Feb 01	Purchases A/c	Dr.		25,000
	---------To Ravinderan A/c				25,000
	(Being goods bought from Ravinderan)

Feb 01	Ravinderan A/c	Dr.		25,000
	---------To Bills payable A/c				25,000
	(Being Ravinderan's bill accepted)

Mar 06	Bills Payable A/c	Dr.		25,000
	---------To Ravinderan A/c				25,000
	(Being dishonoured on maturity)

Case iii: When the bill was endorsed to his Cr. or Ganeshan.

Book of Ravinderan

Journal

Date	Particulars		L.F.	Dr. Rs.	Cr. Rs.
2016
Feb 01	Narayanan A/c	Dr.		25,000
	-------To Sales A/c				25,000
	(Being goods sold Narayanan)

Feb01	Bills Receivable A/c	Dr.		25,000
	---------To Narayanan A/c				25,000
	(Being Narayanan's acceptance received)

Feb 01	Ganeshan A/c	Dr.		25,000
	---------To Bills Receivable A/c				25,000
	(Being Narayanan's acceptance endorsed in favour of Ganeshan)

Mar 06	Narayanan A/c	Dr.		25,000
	---------To Ganeshan A/c				25,000
	(Being Narayanan's acceptance dishonoured)

Book Narayanan Journal
Date	Particulars		L.F.	Dr. Rs.	Cr. Rs.
2016
Feb 01	Purchases A/c	Dr.		25,000
	---------To Ravinderan A/c				25,000
	(Being goods bought Ravinderan)

Feb 01	Ravinderan A/c	Dr.		25,000
	---------To Bills Payable A/c				25,000
	(Being Ravinderan's accepted received)

Mar 06	Bills Payable A/c	Dr.		25,000
	---------To Ravinderan A/c				25,000
	(Being Ravinderan's bill dishonoured on due date)

Case iv: When the bill was sent by Ravinderan to his bank for collection a few days before it maturity.

Books of Ravinderan

Journal

Date	Particulars		L.F.	Dr. Rs.	Cr. Rs.
2016
Feb 01	Narayanan A/c	Dr.		25,000
	---------To Sales A/c				25,000
	(Being goods sold to Narayanan)

Feb 01	Bills Receivable A/c	Dr.		25,000
	---------To Narayanan A/c				25,000
	(Being Narayanan's acceptance received)

Feb 01	Bills Sent for Collection A/c	Dr.		25,000
	---------To Bills Receivable A/c				25,000
	(Being bill Send to bank for collection)

Mar 06	Narayanan A/c	Dr.		25,000
	---------To Bills Sent for Collection A/c				25,000
	(Being bill got dishonoured)

Book of Narayanan Journal
Date	Particulars		L.F.	Dr. Rs.	Cr. Rs.
2016
Feb 01	Purchases A/c	Dr.		25,000
	---------To Ravinderan A/c				25,000
	(Being bought goods from Ravinderan)

Feb 01	Ravinderan A/c	Dr.		25,000
	---------To Bills Payable A/c				25,000
	(Being Ravinderan's bill accepted)

Mar 06	Bills Payable A/c	Dr.		25,000
	---------To Ravinderan A/c				25,000
	(Being Ravinderan's bill dishonoured)

Solution NUM 10

Books of Ravi Journal
Date	Particulars		L.F.	Dr. Rs.	Cr. Rs.
2016
Feb 13	Sudershan A/c	Dr.		40,000
	---------To Sales A/c				40,000
	(Being goods sold to Sudershan)

Feb 13	Bills Receivable A/c	Dr.		40,000
	---------To Sudershan A/c				40,000
	(Being four bills from Sudershan received: the first for Rs.5,000, the second bill for Rs.10,000, the third bill for Rs.12,000 and the fourth bill for Rs.13,000)

Feb 13	Bank A/c	Dr.		4,975
	Discount A/c	Dr.		25
	---------To Bills Receivable A/c				5,000
	(Being the first bill discounted with bank at 6% p.a. for 1 month)

Feb 13	Mustaq A/c	Dr.		10,200
	---------To Bills Receivable A/c				10,000
	---------To Discount Received A/c				200
	(Being the second bill endorsed to Mustaq in full settlement of amount Rs.10,200 due to him)

Mar 02	Bills Sent for Collection A/c	Dr.		13,000
	---------To Bills Receivable A/c				13,000
	(Being the forth bill send to bank for collection)

Mar 07	Sudershan A/c	Dr.		13,000
	---------To Bill Sent for Collection A/c				13,000
	(Being the fourth bill dishonoured on due date)

Mar 07	Sudershan A/c	Dr.		81
	---------To Interest A/c				81
	(Being interest due on the fourth bill Rs.13,000 for 19 days at 12% p.a.)

Mar 10	Cash A/c	Dr.		13,081
	---------To Sudershan A/c				13,081
	(Bing cash received from Sudershan)

Mar 16	Sudershan A/c	Dr.		5,000
	---------To Bank A/c				5,000
	(Being the first bill dishonoured)

Mar 16	Sudershan A/c	Dr.		50
	---------To Interest A/c				50
	(Being interest due on amount Rs.5,000 at 12% for one month)

Mar 19	Cash A/c	Dr.		5,050
	---------To Sudershan A/c				5,050
	(Being Sudershan paid the amount due on account dishonoured of the first bill plus interest)

Mar 28	Sudershan A/c	Dr.		10,000
	Discount Received A/c	Dr.		200
	---------To Mustaq A/c				10,200
	(Being second bill dishonoured, which had endorsed in favour of Mustaq)

Mar 28	Sudershan A/c	Dr.		132
	---------To Interest A/c				132
	(Being interest charges at 12% on the amount due on account of dishonour of the second bill Rs.10,000)

Apr 01	Cash A/c	Dr.		10,132
	---------To Sudershan A/c				10,132
	(Being received cash from Sudershan for the second bill along with interest)

May 16	Sudershan A/c	Dr.		12,000
	---------To Bills Receivable A/c				12,000
	(Being the third bill dishonoured on due date)

May 16	Sudershan A/c	Dr.		360
	---------To Interest A/c				360
	(Being interest at 12% for 3 months charged on the amount due on account of dishonour the third bill Rs.12,000)

May 19	Cash A/c	Dr.		12,360
	---------To Sudershan A/c				12,360
	(Being cash received from Sudershan for the third bill along with interest 12% p.a.)

Ledger Sundershan's Account
Dr.							Cr.
Date	Particulars	J.F.	Amount Rs.	Date	Particulars	J.F.	Amount Rs.
2016				2016
Feb 13	To Sales A/c		40,000	Feb 13	By Bills Receivable A/c		40,000
Mar 07	To Bill sent for Collection A/c		13,000	Mar 10	By Cash A/c		13,081
Mar 07	To Interest A/c		81	Mar 19	By Cash A/c		5,050
Mar 16	To Bank A/c		5,000	Apr 01	By Cash A/c		10,132
Mar 16	To Interest A/c		50	May 19	By Cash A/c		12,360
Mar 28	To Mustaq A/c		10,000
Mar 28	To Interest A/c		132
May 16	To Bills Receivable A/c		12,000
May 16	To Interest A/c		360

			80,623				80,623

Mustaq's Account
Dr.							Cr.
Date	Particulars	J.F.	Amount Rs.	Date	Particulars	J.F.	Amount Rs.
2016				2016
Feb 13	To Bills Receivable A/c		10,000	Mar 28	By Sudershan A/c		10,000
Feb 13	To Discount Received A/c		200	Mar 28	By Discount Received A/c		200

			10,200				10,200

Book of Sudershan Journal
Date	Particulars		L.F.	Dr. Rs.	Cr. Rs.
2016
Feb13	Purchases A/c	Dr.		40,000
	---------To Ravi A/c				40,000
	(Being goods bought from Ravi)

Feb13	Ravi A/c	Dr.		40,000
	---------To Bills Payable A/c				40,000
	(Being four bills drawn by Ravi accepted: the first second for Rs.5,000, payable after one month, the second for Rs.10,000, payable after 40 days, the third for Rs.12,000 payable after 3 month and the fourth for Rs.13,000 payable after 19 days)

Mar 07	Bills Payable A/c	Dr.		13,000
	---------To Ravi A/c				13,000
	(Being the fourth bill dishonoured)

Mar 07	Interest A/c	Dr.		81
	---------To Ravi A/c				81
	(Being interest charged for the fourth bill at 12% p.a.)

Mar 10	Ravi A/c	Dr.		13,081
	---------To Cash A/c				13,081
	(Bing cash paid to Ravi for amount of dishonour of the fourth bill along with interest at 12% p.a. for 19 days)

Mar 16	Bills Payable A/c	Dr.		5,000
	---------To Ravi A/c				5,000
	(Being the first bill dishonoured)

Mar 16	Interest A/c	Dr.		50
	---------To Ravi A/c				50
	(Being interest at 12% p.a on the first bill for one month)

Mar19	Ravi A/c	Dr.		5,050
	---------To Cash A/c				5,050
	(Being cash paid to Ravi amount due on account of dishonour of the first bill along with interest at 12% p.a. for one month)

Mar 28	Bills Payable A/c	Dr.		10,000
	---------To Ravi A/c				10,200
	(The second bill dishonoured)

Mar 28	Interest A/c	Dr.		132
	---------To Ravi A/c				132
	(Being interest charges at 12% p.a. for 40 days on the second bill)

Apr 01	Ravi A/c	Dr.		10,132
	---------To Cash A/c				10,132
	(Being cash paid to Ravi for amount due on account of dishonour of the second bill along with interest at 12% p.a. for 40 days)

May 16	Bills Payable A/c	Dr.		12,000
	---------To Ravi A/c				12,000
	(Being the third bill dishonoured)

May 16	Interest A/c	Dr.		360
	---------To Cash A/c				360
	(Being interest at 12% p.a. for 3 months on third bill)

May 19	Ravi A/c	Dr.		12,360
	---------To Cash A/c				12,360
	(Being cash paid for amount due on account of dishonour of the third bill along with interest 12% p.a. for 3 months)

Book of Mustaq Journal
Date	Particulars		L.F.	Dr. Rs.	Cr. Rs.
2016
Feb13	Bills Receivable A/c	Dr.		10,000
	Discount Allowed A/c	Dr.		200
	---------To Ravi A/c				10,200
	(Being bills receivable received from Ravi and allowed discount)

Mar 28	Ravi A/c	Dr.		10,200
	---------To Bills Receivable A/c				10,000
	---------To Discount Received A/c				200
	(Being bill dishonoured)

Book of Bank Journal
Date	Particulars		L.F.	Dr. Rs.	Cr. Rs.
2016
Mar02	Bills Receivable A/c	Dr.		13,000
	---------To Bills sent for Collection A/c				13,000
	(Being bills received from Ravi for collection)

Mar 07	Bills sent for Collection A/c	Dr.		13,000
	---------To Bills Receivable A/c				13,000
	(Being bill dishonoured)

Bills of Exchange Exercise 313

Solution NUM 11

Book of Neha Journal
Date	Particulars		L.F.	Dr. Rs.	Cr. Rs.
2016
Jan 01	Muskan A/c	Dr.		20,000
	---------To Sales A/c				20,000
	(Being goods sold to Muskan)

Jan 01	Bills Receivable A/c	Dr.		20,000
	---------To Muskan A/c				20,000
	(Being Muskan's acceptance received)

Feb 04	Cash A/c	Dr.		19,800
	Rebate on bill A/c	Dr.		200
	---------To Bills Receivable A/c				20,000
	(Being Muskan's acceptance retired one month before maturity and allowed rebate at 12% p.a.)

Book of Muskan Journal
Date	Particulars		L.F.	Dr. Rs.	Cr. Rs.
2016
Jan 01	Purchases A/c	Dr.		20,000
	---------To Neha A/c				20,000
	(Being goods bought from Neha)

Jan 01	Neha A/c	Dr.		20,000
	---------ToBills Payable A/c				20,000
	(Being bill drawn by Neha payable after 2 months accepted)

Feb 04	Bills Payable A/c	Dr.		20,000
	---------To Cash A/c				19,800
	---------To Rebate on Bills A/c				200
	(Being bill paid one month before maturity and received rebate at 12% p.a.)

Solution NUM 12

Books of Raghu Journal
Date	Particulars		L.F.	Dr. Rs.	Cr. Rs.
2016
Jan 15	Devendra A/c	Dr.		35,000
	---------To Sales A/c				35,000
	(Being goods sold to Devendra)

Jan 15	Bills Receivable A/c	Dr.		35,000
	--------- To Devendra A/c				35,000
	(Being three bills received from Devendra; first bill for Rs.5,000, second bill for Rs.20,000 and third bill Rs.10,000)

Jan 15	Dewan A/c	Dr.		5,200
	--------- To Bills Receivable A/c				5,000
	--------- To Discount Received A/c				200
	(Being the first bill endorsed to Dewan in full settlement of amount due to him)

Jan.15	Bank A/c	Dr.		19,700
	Bills Discounting Charges A/c	Dr.		300
	--------- To Bills Receivable A/c				20,000
	(Being the second bill discounted with bank at 6% p.a.)

Apr 18	Devendra A/c	Dr.		20,030
	---------To Bank A/c				20,030
	(Being the second bill dishonoured and bank paid Rs.30 for noting charges)

May 14	Bill Sent for Collection A/c	Dr.		10,000
	---------To Bills Receivable A/c				10,000
	(Being third bill send to bank for collection)

May 18	Devendra A/c	Dr.		10,200
	---------To Bill Sent for Collection A/c				10,000
	---------To Bank A/c				200
	(Being the third bill dishonoured and bank paid Rs.200 as noting charges)

May 23	Devendra A/c	Dr.		1,000
	---------To Interest A/c				1,000
	(Being interest due to Devendra on of bills dishonoured)

May 23	Cash A/c	Dr.		31,230
	---------To Devendra A/c				31,230
	(Being entire amount received from Devendra)

Ledger Devendra's Account
Dr.							Cr.
Date	Particulars	J.F.	Amount Rs.	Date	Particulars	J.F.	Amount Rs.
2016				2016
Jan 15	To Sales A/c		35,000	Jan 15	By Bills Receivable A/c		35,000
Apr 18	To Bank A/c		20,030	May 23	By Cash A/c		31,230
May 18	To Bills sent for Collection A/c		10,000
May 18	To Bank A/c		200
May 23	To Interest A/c		1,000

			66,230				66,230

Books of Devendra Journal
Date	Particulars		L.F.	Dr. Rs.	Cr. Rs.
2016
Jan 15	Purchases A/c	Dr.		35,000
	---------To Raghu A/c				35,000
	(Being goods bought from Raghu)

Jan 15	Raghu A/c	Dr.		35,000
	---------To Bills Payable A/c				35,000
	(Being three bills drawn by Raghu accepted: first bill for Rs.5,000 payable after one month, second for Rs.20,000 payable after 3 months and third for Rs.10,000 payable after 4 months)

Feb 18	Bills Payable A/C	Dr.		5,000
	---------To Cash A/c				5,000
	(Being the first bill discharged on the due date)

Apr18	Bills Payable A/c	Dr.		20,000
	Noting Charges A/c	Dr.		30
	---------To Raghu A/c				20,030
	(Being the second bill dishonoured and noting charges Rs.30)

May 18	Bills Payable A/c	Dr.		10,000
	Noting Charges A/c	Dr.		200
	---------To Raghu A/c				10,200
	(Being third bill dishonoured and noting charges Rs.200)

May 23	Interest A/c	Dr.		1,000
	---------To Raghu A/c				1,000
	(Being interest charges Rs.1,000 due to bills dishonoured)

May 23	Cash A/c	Dr.		31,230
	---------To Bank Loan A/c				31,230
	(Being bank loan taken for settling Raghu's account)

May 23	Raghu A/c	Dr.		31,230
	---------To Cash A/c				31,230
	(Being cash paid to Raghu in settlement of the bills.)

Ledger Raghu's Account
Dr.							Cr.
Date	Particulars	J.F.	Amount Rs.	Date	Particulars	J.F.	Amount Rs.
2016				2016
Jan 15	To Bills Payable A/c		35,000	Jan 15	By Purchases A/c		35,000
May 23	To Cash A/c		31,230	Apr 18	By Bills Payable A/c		20,000
				Apr 18	By Noting Charges A/c		30
				May 18	By Bills Payable A/c		10,000
				May 18	By Noting Charges A/c		200
				May 18	By Interest A/c		1,000

			66,230				66,230

Book of Dewan Journal
Date	Particulars		L.F.	Dr. Rs.	Cr. Rs.
2016
Jan15	Bills Receivable A/c	Dr.		5,000
	Discount Allowed A/c	Dr.		200
	---------To Raghu A/c				5,200
	(Being bill receivable received from Raghu for one month and allowed him discount of Rs.200)

Feb18	Cash A/c	Dr.		5,000
	---------To Bills Receivable A/c				5,000
	(Being amount received on maturity of the bill)

Solution NUM 13

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

Book of Kamal Journal
Date	Particulars		L.F.	Dr. Rs.	Cr. Rs.
2016
Jan 15	Vimal A/c	Dr.		25,000
	---------To Sales A/c				25,000
	(Being goods sold to Vimal)

Jan 15	Bills Receivable A/c	Dr.		25,000
	--------- To Vimal A/c				25,000
	(Being Vimal's acceptance received)

Mar 18	Vimal A/c	Dr.		25,000
	---------To Bills Receivable A/c				25,000
	(Being Vimal acceptance dishonoured)

Book of Vimal Journal
Date	Particulars		L.F.	Dr. Rs.	Cr. Rs.
2016
Jan 15	Purchases A/c	Dr.		25,000
	--------- To Kamal A/c				25,000
	(Being goods bought from Kamal)

Jan 15	Kamal A/c	Dr.		25,000
	--------- To Bills Payable A/c				25,000
	(Being bill drawn Kamal accepted)

Mar 18	Bills Payable A/c	Dr.		25,000
	---------To Kamal A/c				25,000
	(Being bill drawn by Kamal dishonoured)

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

Book of Kamal Journal
Date	Particulars		L.F.	Dr. Rs.	Cr. Rs.
2016
Jan15	Vimal A/c	Dr.		25,000
	--------- To Sales A/c				25,000
	(Being goods sold to Vimal)

Jan15	Bills Receivable A/c	Dr.		25,000
	--------- To Vimal A/c				25,000
	(Being Vimal's acceptance received)

Jan15	Bank A/c	Dr.		24,750
	Bills Discounting Charges A/c	Dr.		250
	---------To Bills Receivable A/c				25,000
	(Being Vimal's acceptance discounted at 6% p.a with bank)

Mar 18	Vimal A/c	Dr.		25,000
	---------To Bank A/c				25,000
	(Being Vimal's acceptance dishonoured)

Book of Vimal

Journal

Date	Particulars		L.F.	Dr. Rs.	Cr. Rs.
2016
Jan 15	Purchases A/c	Dr.		25,000
	--------- To Kamal A/c				25,000
	(Being goods bought from Kamal)

Jan 15	Kamal A/c	Dr.		25,000
	--------- To Bills Payable A/c				25,000
	(Being bill drawn by Kamal accepted)

Mar 18	Bills Payable A/c	Dr.		25,000
	---------To Kamal A/c				25,000
	(Being bills drawn by Kamal dishonoured)

Case iii: The bill was endorsed by Kamal in favour of his Cr. or Sharad.

Book of Kamal Journal
Date	Particulars		L.F.	Dr. Rs.	Cr. Rs.
2016
Jan15	Vimal A/c	Dr.		25,000
	---------To Sales A/c				25,000
	(Being goods sold to Vimal)

Jan15	Bills Receivable A/c	Dr.		25,000
	--------- To Vimal A/c				25,000
	(Being Vimal's acceptence received)

Jan 15	Sharad A/c	Dr.		25,000
	---------To Bills Receivable A/c				25,000
	(Being Vimal's acceptance endorsed to Sharad)

Mar 18	Vimal A/c	Dr.		25,000
	---------To Sharad A/c				25,000
	(Being Vimal's acceptance endorsed to Kamal dishonoured)

Book of Vimal Journal
Date	Particulars		L.F.	Dr. Rs.	Cr. Rs.
2016
Jan15	Purchases A/c	Dr.		25,000
	---------To Kamal A/c				25,000
	(Being goods bought from Kamal)

Jan15	Kamal A/c	Dr.		25,000
	--------- To Bills Payable A/c				25,000
	(Being bill drawn by Kamal accepted)

Mar 18	Bills Payable A/c	Dr.		25,000
	---------To Kamal A/c				25,000
	(Being bill drawn by Kamal dishonoured)

Caseiv: Five days before its maturity the bill was sent by Kamal to his bank for collection.

Book of Kamal Journal
Date	Particulars		L.F.	Dr. Rs.	Cr. Rs.
2016
Jan 15	Vimal A/c	Dr.		25,000
	---------To Sales A/c				25,000
	(Being goods sold to Vimal)

Jan 15	Bills Receivable A/c	Dr.		25,000
	--------- To Vimal A/c				25,000
	(Being Vimal's acceptance received)


Mar 13	Bills Sent for Collection A/c	Dr.		25,000
	---------To Bills Receivable A/c				25,000
	(Being Vimal's acceptance send to bank for collection)


Mar 18	Vimal A/c	Dr.		25,000
	---------To Bill Send for Collection A/c				25,000
	(Being Vimal's acceptance dishonoured)

Book of Vimal Journal
Date	Particulars		L.F.	Dr. Rs.	Cr. Rs.
2016
Jan 15	Purchases A/c	Dr.		25,000
	---------To Kamal A/c				25,000
	(Being goods bought from Kamal)

Jan 15	Kamal A/c	Dr.		25,000
	--------- To Bills Payable A/c				25,000
	(Being bill drawn by Kamal accepted)

Mar 18	Bills Payable A/c	Dr.		25,000
	---------To Kamal A/c				25,000
	(Being bill drawn by Kamal dishonoured)

Bills of Exchange Exercise 314

Solution NUM 14

Books of Abdula Journal
Date	Particulars		L.F.	Dr. Rs.	Cr. Rs.
2017
Jan 17	Tahir A/c	Dr.		18,000
	---------To Sales A/c				18,000
	(Being goods sold to Tahir)

Jan17	Bills Receivable A/c	Dr.		18,000
	---------To Tahir A/c				18,000
	(Being Tahir's acceptance received)

Mar 06	Tahir A/c	Dr.		18,040
	---------To Bills Receivable A/c				18,000
	---------To Cash A/c				40
	(Being Tahir's acceptance dishonoured and Rs.40 paid as noting charges)

Mar 06	Tahir A/c	Dr.		660
	---------To Interest A/c				660
	(Being interest charged from Tahir on account of bill dishonoured)

Mar 11	Cash A/c	Dr.		18,700
	---------To Tahir A/c				18,700
	(Being amount paid by Tahirto clear his account)

Ledger Tahir's Account
Dr.							Cr.
Date	Particulars	J.F.	Amount Rs.	Date	Particulars	J.F.	Amount Rs.
2017				2017
Jan 17	To Sales A/c		18,000	Jan 17	By Bills Receivable A/c		18,000
Mar 06	To Bills Receivable A/c		18,000	Mar 11	By Cash A/c		18,700
Mar 06	To Cash A/c		40
Mar 06	To Interest A/c		660

			36,700				36,700

Books of Tahir Journal
Date	Particulars		L.F.	Dr. Rs.	Cr. Rs.
2017
Jan 17	Purchases A/c	Dr.		18,000
	---------To Abdula A/c				18,000
	(Being goods bought from Abdula)

Jan 17	Abdula A/c	Dr.		18,000
	---------To Bills Payable A/c				18,000
	(Being bill drawn by Abdula accepted, payable after 45 days)

Mar 06	Bills Payable A/c	Dr.		18,000
	Noting Charges A/c	Dr.		40
	---------To Abdula A/c				18,040
	(Being Abdula's bill dishonoured)

Mar 07	Interest A/c	Dr.		660
	---------To Abdula A/c				660
	(Being interest charged on account of bill dishonoured)

Mar 11	Abdula A/c	Dr.		18,700
	---------To Cash A/c				18,700
	(Being total amount paid to Abdula in cash)

Ledger

Abdula's Account

Dr.							Cr.
Date	Particulars	J.F.	Amount Rs.	Date	Particulars	J.F.	Amount Rs.
2017				2017
Jan 17	To Bills Payable A/c		18,000	Jan 17	By Purchases A/c		18,000
Mar 11	To Cash A/c		18,700	Mar 06	By Bills Payable A/c		18,000
				Mar 06	By Noting Charges A/c		40
				Mar 06	By Interest A/c		660

			36,700				36,700

Solution NUM 15

Book of Asha Journal
Date	Particulars		L.F.	Dr. Rs.	Cr. Rs.
2017
Mar 02	Nisha A/c	Dr.		19,000
	----------To Sales A/c				19,000
	(Being goods sold to Nisha on Cr.)

Mar 02	Cash A/c	Dr.		4,000
	Bills Receivable A/c	Dr.		15,000
	----------To Nisha A/c				19,000
	(Being cash paid and Nisha's acceptance received for 3 months for the balance amount)

Mar 02	Bank A/c	Dr.		14,775
	Discount A/c (15,000 * 6% * 3/12)	Dr.		225
	----------To Bills Receivable A/c				15,000
	(Being Nisha's acceptance discounted with bank at 6% p.a.)

June 05	NishaA/c	Dr.		15,030
	----------To Bank A/c				15,030
	(Being Nisha's acceptance dishonoured and bank paid Rs.30 as noting charges)

Book of Nisha Journal
Date	Particulars		L.F.	Dr. Rs.	Cr. Rs.
2017
Mar 02	Purchases A/c	Dr.		19,000
	----------To Asha A/c				19,000
	(Being goods bought from Asha on Cr.)

Mar 02	Asha A/c	Dr.		19,000
	----------To Bills Payable A/c				15,000
	----------To Cash A/c				4,000
	(Being Asha's bill accepted payable after three month and Rs.4,000 paid in cash)

Jun 05	Bills Payable A/c	Dr.		15,000
	Noting Charges A/c	Dr.		30
	----------To Asha A/c				15,030
	(Being Asha's bill dishonoured)

Solution NUM 16

Books of Sharma Journal
Date	Particulars		L.F.	Dr. Rs.	Cr. Rs.
2017
Feb 02	Verma A/c	Dr.		17,500
	----------To Sales A/c				17,500
	(Being goods sold to Verma on credit)

Feb 02	Cash A/c	Dr.		2,500
	Bills Receivable A/c	Dr.		15,000
	----------To VermaA/c				17,500
	(Being cash Rs.2,500 and promissory note Rs.15,000 received from Verma for 60 days)

Feb 02	Gupta A/c	Dr.		15,400
	----------To Bills Receivable A/c				15,000
	----------To Discount Received A/c				400
	(Being promissory note endorsed to Gupta in full settlement of amount due to him)

Apr 06	Discount Received A/c	Dr.		400
	Verma A/c	Dr.		15,050
	----------To Gupta A/c				15,450
	(Being promissory note issued by Verma dishonouredand Gupta paid Rs.50 as noting charges)

Apr 06	Interest A/c	Dr.		50
	----------To Gupta A/c				50
	(Being interest of Rs.50 Dr.ed to Gupta, on account of dishonour of promissory note)

Apr 06	Gupta A/c	Dr.		15,500
	----------To Bank A/c				15,500
	(Being Gupta's account settled)

Apr 06	Bank A/c	Dr.		15,050
	----------To Verma				15,050
	(Being cheque received from Verma for the amount due from him)

Ledger Verma's Account
Dr.							Cr.
Date	Particulars	J.F.	Amount Rs.	Date	Particulars	J.F.	AmountRs.
2017				2017
Feb 02	To Sales A/c		17,500	Feb 02	By Cash A/c		2,500
Apr 06	To Gupta A/c		15,050	Feb 02	By Bills Receivable A/c		15,000
				Apr 06	By Bank A/c		15,050
			32,550				32,550

Gupta's Account
Dr.							Cr.
Date	Particulars	J.F.	Amount Rs.	Date	Particulars	J.F.	Amount Rs.
2017				2017
Feb 02	To Bills Receivable A/c		15,000	Apr 01	By Balance b/d		15,400
Feb 02	To Discount Received A/c		400	Apr 06	By Verma A/c		15,050
Apr 06	To Bank A/c		15,500	Apr 06	By Discount received A/c		400
				Apr 06	By Interest A/c		50
			30,900				30,900

Books of Verma Journal
Date	Particulars		L.F.	Dr. Rs.	Cr. Rs.
2017
Feb 02	Purchases A/c	Dr.		17,500
	----------To Sharma A/c				17,500
	(Being goods bought from Sharma)

Feb 02	Sharma A/c	Dr.		17,500
	----------To Bills Payable A/c				15,000
	----------To Cash A/c				2,500
	(Being cash Rs.2,500 paid and promissory note made for the balance)

Apr 06	Bills Payable A/c	Dr.		15,000
	Noting Charges A/c	Dr.		50
	----------To Sharma A/c				15,050
	(Being promissory note dishonoured on maturity)

Apr 06	Sharma A/c	Dr.		15,050
	----------To Bank A/c				15,050
	(Being payment made to Sharma through cheque)

Ledger Sharma's Account
Dr.							Cr.
Date	Particulars	J.F.	Amount Rs.	Date	Particulars	J.F.	Amount Rs.
2017				2017
Feb 02	To Cash A/c		2,500	Feb 02	By Purchases A/c		17,500
Feb 02	To Bills Payable A/c		15,000	Apr 06	By Bills Payable A/c		15,000
Mar 06	To Bank A/c		50	Apr 06	By Noting Charges A/c		50
			30,900				30,900

Books of Gupta Journal
Date	Particulars		L.F.	Dr. Rs.	Cr. Rs.
2017
Feb 02	Bills Receivable A/c	Dr.		15,000
	Discount Allowed A/c	Dr.		400
	----------To Sharma A/c				15,400
	(Being promissory note Rs.15,000 received from Sharma in full settlement for 60 days)

Apr 06	Sharma A/c	Dr.		15,450
	----------To Bills Receivable A/c				15,000
	----------To Discount Allowed A/c				400
	----------To Bank A/c				50
	(Being promissory note received from Sharma, dishonoured)

Apr 06	Sharma A/c	Dr.		50
	----------To Interest A/c				50
	(Being interest Rs.50 credited on account of promissory note dishonoured)

Apr 06	Bank A/c	Dr.		15,500
	----------To Sharma A/c				15,500
	(Being cheque received from Sharma)

Ledger Sharma's Account
Dr.							Cr.
Date	Particulars	J.F.	Amount Rs.	Date	Particulars	J.F.	Amount Rs.
2017				2017
Feb 01	To Balance b/d		15,400	Feb 02	By Bills Receivable A/c		15,000
Apr 06	To Bills Receivable A/c		15,000	Feb 02	By Discount Allowed A/c		400
Apr 06	To Discount Allowed A/c		4,000	Apr 06	By Bank A/c		15,500
Apr 06	To Bank A/c		50
Apr 06	To Interest A/c		50
			30,900				30,900

Solution NUM 17

Books of Lilly Journal
Date	Particulars		L.F.	Dr. Rs.	Cr. Rs.
2017
Mar 01	Mathew A/c	Dr.		12,000
	----------To Sales A/c				12,000
	(Being goods sold to Mathew)

Mar 01	Bills Receivable A/c	Dr.		12,000
	----------To Mathew A/c				12,000
	(Being Mathew's acceptance received payable after two months)

Mar 01	Bank A/c	Dr.		11,820
	Discounting Charges A/c (9000 * 9% * 2/12)	Dr.		180
	----------To Bills Receivable A/c				12,000
	(Being Mathew's bill discounted at 9% p.a.)

May 03	Mathew A/c	Dr.		12,045
	----------To Bank A/c				12,045
	(Being Mathew's acceptance dishonoured bank paid Rs.45 as noting charges)

May 08	Mathew A/c	Dr.		241
	----------To Interest A/c (12045 * 12% * 2/12)				241
	(Being interest @ 12% Credited to Mathew on account of bill dishonoured)

May 08	Bank A/c	Dr.		12,286
	----------To Mathew A/c				12,286
	(Being cheque received from Mathew for the amount due from him)

Note: In this question, May 04 has been considered as holiday, so the date of maturity will be May 03, 2017 in place of May 04, 2017.

Ledger Mathew's Account
Dr.							Cr.
Date	Particulars	J.F.	Amount Rs.	Date	Particulars	J.F.	Amount Rs.
2017				2017
Mar 01	To Sales A/c		12,000	Mar 01	By Bills Receivable A/c		12,000
May 03	To Bank A/c		12,045	May 08	By Bank A/c		12,286
May 08	To Interest A/c		241
			24,286				24,286

Books of Mathew Journal
Date	Particulars		L.F.	Dr. Rs.	Cr. Rs.
2017
Mar 01	Purchases A/c	Dr.		12,000
	----------To Lilly A/c				12,000
	(Being goods sold to Mathew)

Mar 01	Lilly A/c	Dr.		12,000
	----------To Bills Payable A/c				12,000
	(Being Lilly's acceptance payable after two month accepted)

May 03	Bills Payable A/c	Dr.		12,000
	Noting Charges A/c	Dr.		45
	----------To Lilly A/c				12,045
	(Being drawn by Lilly dishonoured)

May 08	Interest A/c	Dr.		241
	----------To Lilly A/c				241
	(Being interest @ 12% from Lilly on account of bill dishonoured)

May 08	Lilly A/c	Dr.		12,286
	----------To Bank A/c				12,286
	(Being amount paid Lilly through cheque)

Ledger Lilly's Account
Dr.							Cr.
Date	Particulars	J.F.	Amount Rs.	Date	Particulars	J.F.	Amount Rs.
2017				2017
Mar 01	To Bills Payable A/c		12,000	Mar 01	By Purchases A/c		12,000
May 08	To Bank A/c		12,286	May 03	By Bills Payable A/c		12,000
				May 03	By Noting Charges A/c		45
				May 08	By Interest A/c		241
			24,286				24,286

Note: In this question, there is a contradiction. As per the discounting rule-Bank is regarded as the holder of the bill. It is the bank who presents the bill for payment and also pays the noting charges on behalf of the drawer (Lilly). However, as per the question. Lilly, who is presenting, discounting the bill and also paying the noting charges. Thus, in the solution, we have assumed that it is bank and not Lilly who presents, discounts and pays the noting charges in case of dishonour of bill.

Solution NUM 18

Book of Gaurav Journal
Date	Particulars		L.F.	Dr. Rs.	Cr. Rs.
2017
Feb 01	Kapil A/c	Dr.		21,000
	----------To Sales A/c				21,000
	(Being goods sold to Kapil)

Feb 01	Bills Receivable A/c	Dr.		21,000
	----------To Kapil A/c				21,000
	(Being Kapil's acceptance received)

Feb 25	Bills Sent for Collection A/c	Dr.		21,000
	----------To Bills Receivable A/c				21,000
	(Being bill receivable sent to bank for collection)

Mar 04	Kapil A/c	Dr.		21,100
	----------To Bill Sent for Collection A/c				21,000
	----------To Bank A/c				100
	(Being Kapil's acceptance dishonoured and bank paid noting charges)

Book of Kapil Journal
Date	Particulars		L.F.	Dr. Rs.	Cr. Rs.
2017
Feb 01	Purchases A/c	Dr.		21,000
	----------To Gaurav A/c				21,000
	(Being goods bought from Gaurav)

Feb 01	Gaurav A/c	Dr.		21,000
	----------To Bills Payable A/c				21,000
	(Being drawn by Gaurav payable after one month accepted)

Mar 04	Bills Payable A/c	Dr.		21,000
	Noting Charges A/c	Dr.		100
	----------To Gaurav A/c				21,100
	(Being drawn by Kapil dishonoured)

Bills of Exchange Exercise 315

Solution NUM 19

Book of Rashmi Journal
Date	Particulars		L.F.	Dr. Rs.	Cr. Rs.
2017
Feb 14	AlkaA/c	Dr.		7,500
	----------To Sales A/c				7,500
	(Being goods sold to Alka)

Feb 14	Cash A/c	Dr.		500
	Bills Receivable A/c	Dr.		7,000
	----------To Alka A/c				7,500
	(Being cash received Rs.500 and the bill accepted by Alka)

Apr 10	AlkaA/c	Dr.		7,000
	----------To Bills Receivable A/c				7,000
	(Being Alka got the bill cancelled)

Apr 10	Cash A/c	Dr.		2,000
	----------To Alka A/c				2,000
	(Being received cash from Alka)

Apr 10	Alka A/c	Dr.		500
	----------To Interest A/c				500
	(Being interest charged on the amount due from Alka)

Apr 10	Bills Receivable A/c	Dr.		5,500
	----------To Alka A/c				5,500
	(Being Alka's acceptance payable of two months received)

June 13	Cash A/c	Dr.		5,500
	----------To Bills Receivable A/c				5,500
	(Being Alka's acceptance met on due date)

Ledger Alaka's Account
Dr.							Cr.
Date	Particulars	J.F.	Amount Rs.	Date	Particulars	J.F.	Amount Rs.
2017				2017
Feb 14	To Sales A/c		7,500	Feb 14	By Cash A/c		500
Apr 10	To Bills Receivable A/c		7,000	Feb 14	By Bills Receivable A/c		7,000
Apr 10	To Interest A/c		500	Apr 10	By Cash A/c		2,000
				Apr 10	By Bills Receivable A/c		5,500
			15,000				15,000

Book of Alka Journal
Date	Particulars		L.F.	Dr. Rs.	Cr. Rs.
2017
Feb 14	Purchases A/c	Dr.		7,500
	----------To Rashmi A/c				7,500
	(Being goods bought from Rashmi)

Feb 14	Rashmi A/c	Dr.		7,500
	----------To Cash A/c				500
	----------To Bills Payable A/c				7,000
	(Being cash paid to Rashmi Rs.500 and a bill for Rs.7,000 drawn by Rashmi accepted)

Apr 10	Bills Payable A/c	Dr.		7,000
	----------To Rashmi A/c				7,000
	(Being bill cancelled before maturity)

Apr 10	Rashmi A/c	Dr.		2,000
	----------To Cash A/c				2,000
	(Being cash paid to Rashmi)

Apr 10	Interest A/c	Dr.		500
	----------To Rashmi A/c				500
	(Being interest due to Rashmi)

Apr 10	Rashmi A/c	Dr.		5,500
	----------To Bills Payable A/c				5,500
	(Being Rashmi's acceptance payable after two months accepted)

June 13	Bills Payable A/c	Dr.		5,500
	----------To Cash A/c				5,500
	(Being the bill met on due date)

Ledger Rashmi's Account
Dr.							Cr.
Date	Particulars	J.F.	Amount Rs.	Date	Particulars	J.F.	Amount Rs.
2017				2017
Feb 14	To Cash A/c		500	Feb 14	By Purchases A/c		7,500
Feb 14	To Bills Payable A/c		7,000	Apr 10	By Bills Payable A/c		7,000
Apr 10	To Cash A/c		2,000	Apr 10	By Interest A/c		500
Apr 10	To Bills Payable A/c		5,500
			15,000				15,000

Solution NUM 20

Books of Nikhil

Journal

Date	Particulars		L.F.	Dr. Rs.	Cr. Rs.
2017
Dec 01	Akhil A/c	Dr.		23,000
	----------To Sales A/c				23,000
	(Being goods sold to Akhil)

Dec 01	Bills Receivable A/c	Dr.		23,000
	----------To Akhil A/c				23,000
	(Being Akhil's acceptance received)

Dec 01	Bank A/c	Dr.		22,540
	Discount Charges A/c (23,000 * 12% * 2/12)	Dr.		460
	----------To Bills Receivable A/c				23,000
	(Being Akhil's acceptance discounted at 12% p.a. with bank)
2018
Feb 04	Akhil A/c	Dr.		23,100
	----------To Bank A/c				23,100
	(Being Akhil's acceptance dishonoured, bank paid Rs.100 as noting charges)

Feb 04	Akhil A/c	Dr.		385
	----------To Interest A/c(23,100 * 10% * 2/12)				385
	(Being interest credited on account of bill dishonoured at 10% p.a. for two months)

Feb 04	Bills Receivable A/c	Dr.		23,485
	----------To Akhil A/c				23,485
	(Being new acceptance received from Akhil for next two month received)

Mar 31	Akhil A/c	Dr.		23,485
	----------To Bills Receivable A/c				23,485
	(Being the second bill cancelled one week before maturity)

Mar 31	Cash A/c	Dr.		10,000
	----------To Akhil A/c				10,000
	(Being cash received from Akhil)

Mar 31	Akhil A/c	Dr.		500
	----------To Interest A/c				500
	(Being interest due from Akhil for the bill)

Mar 31	Bills Receivable A/c	Dr.		13,985
	----------To Akhil A/c				13,985
	(Being the bill receivable received from Akhil)

May 03	Cash A/c	Dr.		13,985
	----------To Bills Receivable A/c				13,985
	(Being third bill met on due date)

Ledger Akhil's Account
Dr.							Cr.
Date	Particulars	J.F.	Amount Rs.	Date	Particulars	J.F.	Amount Rs.
2017				2017
Dec 01	To Sales A/c		23,000	Dec 01	By Bills Receivable A/c		23,000
2018				2018
Feb 04	To Bank A/c		23,000	Feb 04	By Bills Receivable A/c		23,485
Feb 04	To Interest A/c		385	Mar 31	By Cash A/c		10,000
Mar 31	To Bills Receivable A/c		23,000	Mar 31	By Bills Receivable A/c		13,985
Mar 31	To Interest A/c		500
			70,470				70,470

Books of Akhil

Journal

Date	Particulars		L.F.	Dr. Rs.	Cr. Rs.
2017
Dec 01	Purchases A/c	Dr.		23,000
	----------To Nikhil A/c				23,000
	(Being goods bought from Nikhil)

Dec 01	Nikhil A/c	Dr.		23,000
	----------To Bills Payable A/c				23,000
	(Being drawn by Nikhil payable after two month accepted)
2018
Feb 04	Bills Payable A/c	Dr.		23,000
	Noting Charges A/c	Dr.		100
	----------To Nikhil A/c				23,100
	(Being bill dishonoured, on due date and Rs.100 paid by the holder of bill)

Feb 04	Interest A/c	Dr.		385
	----------To Nikhil A/c				385
	(Being interest due to Nikhil for the bill dishonoured)

Feb 04	Nikhil A/c	Dr.		23,485
	----------To Bills Payable A/c				23,485
	(Being new bill accepted payable after two months)

Mar 31	Bills Payable A/c	Dr.		23,485
	----------To Nikhil A/c				23,485
	(Being bill cancelled before maturity)

Mar 31	Nikhil A/c	Dr.		10,000
	----------To Cash A/c				10,000
	(Being cash paid to Nikhil)

Mar 31	Interest A/c	Dr.		500
	----------To Nikhil A/c				500
	(Being interest due to Nikhil for bill cancellation)

Mar 31	Nikhil A/c	Dr.		13,985
	----------To Bills Payable A/c				13,985
	(Being new bill accepted payable after one month)

May 03	Bills Payable A/c	Dr.		13,985
	----------To Cash A/c				13,985
	(Being third bill met on maturity)

Ledger Nikhil Account
Dr.							Cr.
Date	Particulars	J.F.	Amount Rs.	Date	Particulars	J.F.	Amount Rs.
2017				2017
Dec 01	To Bills Payable A/c		23,000	Dec 01	By Purchases A/c		23,000
2018				2018
Feb 04	To Bills Payable A/c		23,485	Feb 04	By Bills Payable A/c		23,000
Mar 31	To Cash A/c		10,000	Feb 04	By Noting Charges A/c		100
Mar 31	To Bills Payable A/c		13,985	Feb 04	By Interest A/c		385
				Mar 31	By Bills Payable A/c		23,485
				Mar 31	By Interest A/c		500
			70,470				70,470

Solution NUM 21

Book of Vibha Journal
Date	Particulars		L.F.	Dr. Rs.	Cr. Rs.
2017
Jan 01	SudhaA/c	Dr.		18,000
	----------To Sales A/c				18,000
	(Being goods sold to Sudha)

Jan 01	Bills Receivable A/c	Dr.		18,000
	----------To Sudha A/c				18,000
	(Being Sudha's acceptance received)

Jan 01	Geeta A/c	Dr.		18,000
	----------To Bills Receivable A/c				18,000
	(Being Sudha's acceptance endorsed in favour of Geeta)

Feb 27	Sudha A/c	Dr.		18,000
	----------To Geeta A/c				18,000
	(Being Sudha cancelled the bill five days before the maturity)

Feb 27	Geeta A/c	Dr.		18,000
	----------To Cash A/c				18,000
	(Being cash paid to Geeta)

Feb 27	Sudha A/c	Dr.		200
	----------To Interest A/c				200
	(Being interest credited to Sudha on account of cancelling the bill)

Feb 27	Bills Receivable A/c	Dr.		18,200
	----------To Sudha A/c				18,200
	(Being new bill drawn on Sudha for one month)

Mar 30	Cash A/c	Dr.		18,200
	----------To Sudha A/c				18,200
	(Being Sudha's acceptance met on due date)

Solution NUM 22

Bills Receivable Book

No.

Date of Bill

2017

Date Received

2017

From Whom

of Bill

Drawer

Whom

received

Acceptor

Where

Term

Payable

Due date

2017

L.F.

Amount

Rs.

Cash

Book

Folio

Remarks

Jan 02

Jan 05

Babu

Self

Babu

2 months

Mar 05

4,800

Total

4,800

Bills Payable Book

No.

Date of Bill

2017

To Whom

Given

Drawer

Payee

Where

payable

Term

Due date

2017

Ledger

Amount

Rs.

Date

paid

Cash

Book

Folio

Remarks

Jan12

Sheiba

2 months

Mar 15

12,000

Jan25

Anju

3 months

Apr 28

5,000

Total

17,000

Cash Book
Dr.									Cr.
Date	Particulars	L.F.	Cash Rs.	Bank Rs.	Date	Particulars	L.F.	Cash Rs.		Bank Rs.
2017					2017
Jan 04	To Bills Receivable A/c			4,750	Jan 31	By Balance c/d		2,000		12,650
Jan 10	To Bills Receivable A/c			7,900
Jan 29	To Kiran A/c		2,000
			2,000	12,650				2,000		12,650

There is difference between Bills of Exchange and Promissory Note. In case of Promissory Note, parties are makers and payees. However, in Bills of Exchange parties are Drawer, drawee (acceptor) and payee on account difference Promissory Note has not been recorded in Bills Receivable and Bills Payable book.

Books of Gautam Journal
Date	Particulars		L.F.	Dr. Rs.	Cr. Rs.
2017
Jan 02	Discount Allowed A/c	Dr.		200
	----------To Babu A/c				200
	(Being Babu's acceptance received and allowed him discount Rs.200)

Jan 04	Discount A/c	Dr.		50
	----------To Bills Receivable A/c				50
	(Being Babu's acceptance discounted with a discount charge of Rs.50)

Jan 08	Bills Receivable A/c	Dr.		8,000
	----------To Chanderkala A/c				8,000
	(Being promissory note received from Chanderkala for 3 months)

Jan 10	Discount A/c	Dr.		100
	----------To Bills Receivable A/c				100
	(Being Chanderkala's promissory note discounted with bank at discount of Rs.100)

Jan 22	Bills Receivable A/c	Dr.		14,000
	----------To Anita A/c				14,000
	(Being promissory note received from Anita for 2 months)

Jan 23	Manju A/c			14,000
	----------To Bills Receivable A/c				14,000
	(Being Anita's promissory note endorsed to Manju)

Jan 29	Bills Receivable A/c	Dr.		11,500
	----------To Kiran A/c				11,500
	(Being promissory note received from Kiran for 3 months)

Bills of Exchange Exercise 316

Solution NUM 23

Book of Tanu Journal
Date	Particulars		L.F.	Dr. Rs.	Cr. Rs.
2017
Jan 01	Bills Receivable A/c	Dr.		10,000
	----------To Harsh A/c				10,000
	(Being Harsh's acceptance received)

Jan 01	Bank A/c	Dr.		9,933
	Discounting Charges A/c (10,000 * 8% * 1/12)			67
	----------To Bills Receivable A/c				10,000
	(Being Harsh's acceptance discounted at 8%p.a. for one month)

Feb 04	Harsh A/c	Dr.		10,000
	----------To Bank A/c				10,000
	(Being Harsh's account settled by paying amount due to Harsh through cheque)

Book of Harsh Journal
Date	Particulars		L.F.	Dr. Rs.	Cr. Rs.
2017
Jan 01	Tanu A/c	Dr.		10,000
	----------To Bills Payable A/c				10,000
	(Being bill drawn by Tanu accepted)

Feb 04	Bank A/c	Dr.		10,000
	----------To Tanu A/c				10,000
	(Being cheque received from Tanu)

Feb 04	Bills Payable A/c	Dr.		10,000
	----------To Bank A/c				10,000
	(Being bill drawn by Tanu met on due date)

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Class 11-commerce NCERT Solutions Accountancy Part I Chapter 8: Bills of Exchange

Bills of Exchange Exercise 310

Solution SA 1

Solution SA 2

Solution SA 3

Solution SA 4

Solution SA 5

Solution SA 6

Solution SA 7

Solution SA 8

Solution SA 9

Solution SA 10

Solution SA 11

Solution SA 12

Solution SA 13

Solution SA 14

Solution SA 15

Solution LA 1

Solution LA 2

Solution LA 3

Solution LA 4

Solution LA 5

Solution LA 6

Solution LA 7

Solution NUM 1

Bills of Exchange Exercise 311

Solution NUM 2

Solution NUM 3

Solution NUM 4

Solution NUM 5

Solution NUM 6

Solution NUM 7

Bills of Exchange Exercise 312

Solution NUM 8

Solution NUM 9

Solution NUM 10

Bills of Exchange Exercise 313

Solution NUM 11

Solution NUM 12

Solution NUM 13

Bills of Exchange Exercise 314

Solution NUM 14

Solution NUM 15

Solution NUM 16

Solution NUM 17

Solution NUM 18

Bills of Exchange Exercise 315

Solution NUM 19

Solution NUM 20

Solution NUM 21

Solution NUM 22

Bills of Exchange Exercise 316

Solution NUM 23

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