X draws a bill on Y for ₹4000 which was duly accepted by Y who honours the bill on the - Accountancy - Bills of Exchange

Question

X draws a bill on Y for ₹4000 which was duly accepted by Y
who honours the bill on the due date Show what entries would be
passed in the books of X and Y under each of the following
circumstances:

a) if X retains the bill till the due date
b) if X discounts the same with his banker, paying ₹100 for
discount
c) if X endorses the same to his creditor Z in full settlement of
his debt of ₹4080
d) if X sends the bill to his banker for collection

Trisha · Accepted Answer

IN THE BOOK OF X
PARTICULARS Dr Cr
B/R a/c 4000
To Y a/c 4000
(Y accepts bill drawn)

a Cash a/c 4000
To B/R a/c 4000
(Received payment on maturity)

b Bank a/c 3900
Discounting charges a/c 100
To B/R a/c 4000
(Discounted bill with bank)

c Z a/c 4080
To Discount received a/c 80
To B/R a/c 4000
(Endorsed bill to creditor, discount received)

d Bill sent for collection a/c 4000
To B/R a/c 4000
(Bill sent to bank for collection)

IN THE BOOKS OF Y
PARTICULARS Dr Cr
X a/c 4000
To B/P a/c 4000
(Accepted bill drawn by X)

For sub-questions a,b,c,d the entries would be
same:
B/P a/c 4000
To Bank/Cash a/c 4000