Journal Entries for the Bill of Exchange :
Journal Entries for the Bill of Exchange
Slide 3:
On March 15, 2008 “A” draws a bill on the B Rs. 300 payable 3 month after the date. “B” accepts the bill on 19th March 2008 and returns the same to A. the latter holds the bills till maturity when it is honored by payment. Show entries in the book of A and B.
Journal entries in the book of “A”
19 March B/R A/c ---- Dr
2008 To “B” A/c
(bills accepted by B payable 3 month after the date)
June 18 Bank A/c -------- Dr.
2008 To B/R A/c
(cash received on maturity of the Bill)
. Journal entries in the book of “B”
19 march “A” A/c ----------Dr.
To Bills Payable A/c
(Acceptance of “A”’s Bill Payable 3 month after date )
June 18 Bills payable A/c ---- Dr
To Bank A/c
Bill Endorsed and honored on Maturity :
Bill Endorsed and honored on Maturity On 8-4-2008 Manju draws a bill at 60 days after sight on Manish for Rs.1,000 for goods sold. Manish accept the bills on 12-4-2008. Manju endorses the bill to Manik in discharge of a debt of an equal amount. Manish duly meets the acceptances at maturity. Show Journal entries in the book of all concerned.
Bills Discounted and honored on Maturity :
Bills Discounted and honored on Maturity Aruna Draws a bill on Leela for Rs. 3,000 dated 01/01/08 at 4 months. The bill is accepted by Leela on the same date and forthwise discounted by Aruna with her bankers at 5 %. The bill is duly met at maturity. Show journal Entries in the books of All parties.
Home Work :
Home Work On the 1st sept 08 Honest Dealer purchase goods valued at Rs. 72,000 from Best Manufactures. They sold them to Nice Consumers for Rs. 1,00,000 who agreed to accepts two bills of exchange of equal value payable on 1st march 2009 for the invoice amount plus interest at 10% per annum. Honest dealers Could only sell one of the bill on 30th Sept at a discount of 6% per annum. The other bill was however endorsed to the Suppliers, Best manufactures who agreed to take the bill on 30th sep at a discount 0f 12% per annum together with a cheuqe for the balance. Show by journal entries how all these transaction should be recorded in the books of the Honest dealers. State also how these bills would appear in their balance sheet at 31st December 2008, indicating clearly any note that should appear there.
Journal entries in the of Honest Dealer :
Journal entries in the of Honest Dealer