A for mutual accommodation draws a bio for Rs 30,000 on B A discounted the bill for Rs 29,250 - Accountancy - Bills of Exchange

Question

A for mutual accommodation draws a bio for Rs 30,000 on B A
discounted the bill for Rs 29,250 and remits Rs 9,750 to B On the
due date A is unable to remit her dues to B to enable her to meet
the bill A however, accepts a bio for Rs 37,500 which B discounts
for Rs 35,250 B sends Rs 1,750 to A A becomes insolvent and
dividend of 80 paisa in a rupee is received from A's estate Pass
Journal entries in the books of A

Monika Sharma · Accepted Answer

The solution to your query is provided below

Journal
In the Books of A

Date
Particulars
L F
Debit
Amount
(Rs)
Credit
Amount
(Rs)

Bills Receivable A/c
Dr

30,000

To B

30,000

Cash/Bank A/c
Dr

29,250

Discounting Charges A/c
Dr

750

To Bills Receivable A/c

30,000

B
Dr

10,000

To Cash A/c

9,750

To Discounting Charges

250*

B
Dr

37,500

To Bills Payable A/c

37,500

Bank A/c
Dr

1,750

Discounting Charges A/c
Dr

1,388*

To B

3,138

Bills Payable A/c
Dr

37,500

To B

37,500

B
Dr

23,138

To Bank A/c

18,510

To Deficiency A/c

4,628

B’s Account

Dr

Cr

Particulars
Amount
(Rs)
Particulars
Amount
(Rs)

Bank A/c
9,750
Bills Receivable A/c
30,000

Discounting Charges A/c
250
Bank A/c
1,750

Bills Payable A/c
37,500
Discounting Charges A/c
1,388

Bank A/c
18,510
Bills Payable A/c
37,500

Deficiency A/c
4,628

23, 138

* 75029,250×9,750 = Rs 250

** Total amount payable to B by A = Rs 20,000 + 1,750 = Rs 21,750Calculation of discount2,25035,250×21,750 = Rs 1,388

Journal In the Books of A
Date	Particulars		L.F.	Debit Amount (Rs)	Credit Amount (Rs)
	Bills Receivable A/c	Dr.		30,000
	To B				30,000

	Cash/Bank A/c	Dr.		29,250
	Discounting Charges A/c	Dr.		750
	To Bills Receivable A/c				30,000

	B	Dr.		10,000
	To Cash A/c				9,750
	To Discounting Charges				250*

	B	Dr.		37,500
	To Bills Payable A/c				37,500

	Bank A/c	Dr.		1,750
	Discounting Charges A/c	Dr.		1,388*
	To B				3,138

	Bills Payable A/c	Dr.		37,500
	To B				37,500

	B	Dr.		23,138
	To Bank A/c				18,510
	To Deficiency A/c				4,628

B’s Account
Dr.				Cr.
Particulars	Amount (Rs)	Particulars	Amount (Rs)
Bank A/c	9,750	Bills Receivable A/c	30,000
Discounting Charges A/c	250	Bank A/c	1,750

Bills Payable A/c	37,500	Discounting Charges A/c	1,388
Bank A/c	18,510	Bills Payable A/c	37,500
Deficiency A/c	4,628
	23, 138		23, 138