Question

Sonali draws a bill on Rupali for ₹ 50,000 for 3 months. Rupali accepts the bill on the same date. Sonali sends the bill to the bank for collection. Before the due date, Rupali finds herself unable to make payment of bill and requests Sonali to renew it. Sonali agrees to the proposal on a condition that Rupali should pay ₹ 20,000 in cash along with interest of 1,000 and accept a new bill for 2 months for the balance. Rupali retired the bill by paying ₹ 27,000.

Give Journal entries in the books of Sonali and prepare Rupali’s Account in the books of Sonali.

Answer 1

	In the Journal of Sonali
Date	Particulars	LF.	Debit (₹)	Credit (₹)
(i)	Bills Receivable A/c   ...Dr.		50,000	-
	To Rupali A/c		-	50,000
	(Being acceptance received for 3 months)
(ii)	Bill Sent for Collection A/c    ...Dr.		50,000	-
	To Bills Receivable A/c		-	50,000
	(Being bill sent to bank for collection)
(iii)	Rupali A/c    ...Dr.		50,000	-
	To Bill Sent for Collection A/c		-	50,000
	(Being bill sent to bank for collection cancelled)
(iv)	Rupali A/c    ...Dr.		1,000	-
	To Interest A/c		-	1,000
	(Being interest receivable from Rupali)
(v)	Cash A/c    ...Dr.		20,000	-
	To Rupali A/c		-	20,000
	(Being part payment received with interest)
(vi)	Bills Receivable A/c    ...Dr.		31,000	-
	To Rupali A/c		-	31,000
	(Being new acceptance of 2 months received on account of renewal)
(vii)	Cash A/c    ...Dr.		27,000	-
	Rebate A/c    ...Dr.		4,000	-
	To Bills Receivable A/c		-	31,000
	(Being new bill received at rebate)

 

In the ledger of Sonali
Dr.	Rupali Account						Cr.
Date	Particulars	J.F.	Amount (₹)	Date	Particulars	J.F.	Amount (₹)
	To Balance b/d		50,000		By Bills Receivable A/c		50,000
	To Bill Sent for Collection A/c		50,000		By Cash A/c		20,000
	To Interest A/c		1,000		By Bills Receivable A/c		31,000
			1,01,000				1,01,000