Question

On Jan 15, 2015, Kartar Sold goods for ₹ 30,000 to Bhagwan and drew upon him three bills of exchanges of ₹ 10,000 each payable after one month, two month, and three months respectively. The first bill was retained by Kartar till its maturity. The second bill was endorsed by him in favour of his creditor or Ratna and the third bill was discounted by him immediately @ 6% p.a. All the bills were met by Bhagwan. Journalise the above transactions in the books of Kartar and Bhagwan. Also prepare ledger accounts in books of Kartar and Bhagwan.

Answer 1

Journal Entries in the Books of Kartar
Date	Particulars	L.F.	Debit Amount ₹	Credit Amount ₹
2015
Jan.15	Bhagwan Dr.		30,000
	To Sales A/c			30,000
	(Goods sold to Bhagwan)
Jan.15	Bills Receivable A/c Dr.		10,000
	To Bhagwan			10,000
	(Three bills of ₹ 10,000 each, received from Bhagwan-firs bill for one month, second bill for two months and third bill for three months)
Jan. 15	Ratna Dr.		10,000
	To Bills Receivable A/c			10,000
	(Second bill endorsed to Ratna)
Jan.15	Bank A/c Dr.		9,850
	Discount A/c Dr.		150
	To Bills Receivable A/c			10,000
	(B/R discounted)
Feb.19	Cash A/c Dr.		10,000
	To Bills Receivable A/c			10,000
	(First bill for one month met by Bhagwan, on due date)

 

Dr.	Bhagwan’s Account						Cr.
Date	Particulars	J.F.	Amount (₹)	Date	Particulars	J.F.	Amount (₹)
2015				2015
Jan.15	Sales A/c		30,000	Jan.15	Bills Receivable A/c		30,000
			30,000				30,000

 

Dr.	Ratna’s Account						Cr.
Date	Particulars	J.F.	Amount (₹)	Date	Particulars	J.F.	Amount (₹)
2015				2015
Jan.15	Bills Receivable A/c		10,000	Jan.15	Balance b/d		10,000
			10,000				10,000

 

Dr.	Bills Receivable Account						Cr.
Date	Particulars	J.F.	Amount (₹)	Date	Particulars	J.F.	Amount (₹)
2015				2015
Jan.15	Bhagwan		30,000	Jan.15	Ratna		10,000
				Jan.15	Bank A/c		9,850
				Jan.15	Discount A/c		150
				Feb.19	Cash		10,000
			30,000				30,000

 

Dr.	Cash Account						Cr.
Date	Particulars	J.F.	Amount (₹)	Date	Particulars	J.F.	Amount (₹)
2015				2015
Feb.19	Bills Receivable		10,000	Feb.19	Balance c/d		10,000
			10,000				10,000

 

Dr.	Bank’s Account						Cr.
Date	Particulars	J.F.	Amount (₹)	Date	Particulars	J.F.	Amount (₹)
2015				2015
Jan.15	Bills Receivable		9,850	Jan.15	Balance c/d		9,850
			9,850				9,850

 

Journal Entries in the Books of Bhagwan
Date	Particulars	L.F.	Debit Amount ₹	Credit Amount ₹
2015
Jan.15	Purchases A/c Dr.		30,000
	To Kartar			30,000
	(Good purchased from Kartar on credit)
Jan.15	Kartar Dr.		30,000
	To Bills Payable A/c			30,000
	(Three bill ₹ 10,000 each drawn by Kartar- The first bill  for one month, the second bill for two months  and the third bill for three months, accepted and returned them to Kartar)
Feb.19	Bills Payable A/c Dr.		10,000
	To Cash A/c			10,000
	(First bill was paid on due date)
Mar.19	Bills Payable A/c Dr.		10,000
	To Bank A/c			10,000
	(Second bill was paid on due date to Ratna)
Apr.19	Bills Payable A/c Dr.		10,000
	To Bank A/c			10,000
	(Third bill was paid on due date to bank)

 

Dr.	Kartar’s Account						Cr.
Date	Particulars	J.F.	Amount (₹)	Date	Particulars	J.F.	Amount (₹)
2015				2015
Jan.15	Bills Payable A/c		30,000	Jan.15	Purchases		30,000
			30,000				30,000

 

Dr.	Bills Payable Account						Cr.
Date	Particulars	J.F.	Amount (₹)	Date	Particulars	J.F.	Amount (₹)
2015				2015
Feb.19	Cash A/c		10,000	Jan.15	Kartar		30,000
Mar.19	Bank A/c		10,000
Apr.19	Bank A/c		10,000
			30,000				30,000

 

 

Dr.	Cash Account						Cr.
Date	Particulars	J.F.	Amount (₹)	Date	Particulars	J.F.	Amount (₹)
2015				2015
Feb.19	Balance b/d		10,000	Feb.19	Bills Payable A/c		10,000
			10,000				10,000

 

Dr.	Bank’s Account						Cr.
Date	Particulars	J.F.	Amount (₹)	Date	Particulars	J.F.	Amount (₹)
2015				2015
Mar.15	Balance b/d		20,000	Mar.19	Bills Payable A/c		10,000
				Apr.19	Bills Payable A/c		10,000
			20,000				20,000