on 1st jan ,2010,arun purchased from barun goods invoiced at rs 10000 on the same date ,barun drew upon arun - Accountancy - Bills of Exchange

Question

on 1st jan ,2010,arun purchased from barun goods invoiced at rs
10000 on the same date ,barun drew upon arun abill for the amount
at 2 months and arun accepted the same on 4th january,2010,barun
got the bill discounted with his bank@12%per annum on due date,arun
told barunthat he was not in aposition to pay the fll amount and
requested barun to accept rs 5000 in cash and draw a fresh bill at
2monthsfor the remaining amount plus interest at 15%p a ,barun
agreed the second bill was duly met onthe due date
give journal entries in hte books of arun and barun

Neha A. · Accepted Answer

Dear Student,

The journal entries are as given below

Journal
In the books of Barun
(drawer)

Date

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

2010

Jan 01
Arun
Dr

10,000

To Sales A/c

10,000

(Sold goods to Arun on
credit)

Jan 01
Bill Receivable A/c
Dr

10,000

To Arun

10,000

(Bill received from Arun)

Jan 04
Cash A/c
Dr

9,800

Discounting Charges A/c
Dr

200

To Bill Receivable A/c

10,000

(Bill discounted from bank @ 12% for 2
months)

Mar 04
Arun
Dr

10,000

To Bank A/c

10,000

(Cancellation of old bill)

Mar 04
Cash A/c
Dr

5,000

To Arun

5,000

(Cash received from Arun)

Mar 04
Arun
Dr

125

To Interest A/c

125

(Interest charged for extended
period)

Mar 04
Bill Receivable A/c
Dr

5,125

To Arun

5,125

(New bill received for balance
amount)

May 07
Cash A/c
Dr

5,125

To Bill Receivable A/c

5,125

(New bill honoured)

Journal
In the books of Arun
(drawee)

Date

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

2010

Jan 01
Purchases A/c
Dr

10,000

To Barun

10,000

(Purchased goods from Barun on
credit)

Jan 01
Barun
Dr

10,000

To Bill Payable A/c

10,000

(Bill accepted)

Mar 04
Bill Payable A/c
Dr

10,000

To Barun

10,000

(Cancellation of old bill)

Mar 04
Barun
Dr

5,000

To Cash A/c

5,000

(Cash paid to Barun)

Mar 04
Interest A/c
Dr

125

To Barun

125

(Interest charged for extended
period)

Mar 04
Barun
Dr

5,125

To Bill Payable A/c

5,125

(New bill accepted for balance
amount)

May 07
Bill Payable A/c
Dr

5,125

To Cash A/c

5,125

(New bill honoured)

Journal In the books of Barun (drawer)
Date	Particulars		L.F.	Debit Amount (Rs)	Credit Amount (Rs)
2010
Jan 01	Arun	Dr.		10,000
	To Sales A/c				10,000
	(Sold goods to Arun on credit)

Jan 01	Bill Receivable A/c	Dr.		10,000
	To Arun				10,000
	(Bill received from Arun)

Jan 04	Cash A/c	Dr.		9,800
	Discounting Charges A/c	Dr.		200
	To Bill Receivable A/c				10,000
	(Bill discounted from bank @ 12% for 2 months)

Mar 04	Arun	Dr.		10,000
	To Bank A/c				10,000
	(Cancellation of old bill)

Mar 04	Cash A/c	Dr.		5,000
	To Arun				5,000
	(Cash received from Arun)

Mar 04	Arun	Dr.		125
	To Interest A/c				125
	(Interest charged for extended period)

Mar 04	Bill Receivable A/c	Dr.		5,125
	To Arun				5,125
	(New bill received for balance amount)

May 07	Cash A/c	Dr.		5,125
	To Bill Receivable A/c				5,125
	(New bill honoured)

Journal In the books of Arun (drawee)
Date	Particulars		L.F.	Debit Amount (Rs)	Credit Amount (Rs)
2010
Jan 01	Purchases A/c	Dr.		10,000
	To Barun				10,000
	(Purchased goods from Barun on credit)

Jan 01	Barun	Dr.		10,000
	To Bill Payable A/c				10,000
	(Bill accepted)

Mar 04	Bill Payable A/c	Dr.		10,000
	To Barun				10,000
	(Cancellation of old bill)

Mar 04	Barun	Dr.		5,000
	To Cash A/c				5,000
	(Cash paid to Barun)

Mar 04	Interest A/c	Dr.		125
	To Barun				125
	(Interest charged for extended period)

Mar 04	Barun	Dr.		5,125
	To Bill Payable A/c				5,125
	(New bill accepted for balance amount)

May 07	Bill Payable A/c	Dr.		5,125
	To Cash A/c				5,125
	(New bill honoured)