A liability of Rs 7,004 will be created against bills receivable discounted earlier but now dishonoured What is - Accountancy - Reconstitution- Admission of a Partner

Question

A liability of Rs 7,004 will be created against bills receivable
discounted earlier but now dishonoured What is the journal entry,
effect in Revaluation Account, Partner's Capital Account and
Balance Sheet?

Neha Arora · Accepted Answer

Dear Student,

The impact of the transaction 'A liability of Rs 7,004 will be created
against bills receivable discounted earlier but now dishonoured'
will be on Revaluation A/c and Balance Sheet only

(a) Debit Revaluation A/c with Rs 7,004
(b) Show 'Liability against bills Discounted' as Rs 7,004 on the
Liabilities side of the New Balance Sheet

Journal entry will be as follows

Journal

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

Revaluation A/c
Dr

7,004

To Liability against Bill
Discounted

7,004

(Liability against bill discounted debited to
Revaluation A/c)

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


	Revaluation A/c	Dr.		7,004
	To Liability against Bill Discounted				7,004
	(Liability against bill discounted debited to Revaluation A/c)

A liability of Rs. 7,004 will be created against bills receivable discounted earlier but now dishonoured. What is the journal entry, effect in Revaluation Account, Partner's Capital Account and Balance Sheet?