Question

Vimal purchased goods ₹ 25,000 from Kamal on Jan 15, 2016 and accepted a bill of exchange drawn upon him by Kamal payable after two months. On the date of the maturity the bill was duly presented for payment. Vimal dishonoured the bill. record the necessary journal entries in the books of Kamal and Vimal when.
• The bill was retained by Kamal till the date of its maturity.
• The bill was immediately discounted by Kamal with his bank @ 6% p.a.
• The bill was endorsed by Kamal in favour of his creditor Sharad
• Five days before its maturity the bill was sent by Kamal to his bank for collection.

Answer 1

Case (i): The bill was retained by Kamal till the date of its maturity

Books of Kamal Journal
Date	Particulars	L.F.	Debit Amount ₹	Credit Amount ₹
2016
Jan.15	Vimal Dr.		25,000
	To Sales A/c			25,000
	(Goods sold to Vimal)
Jan.15	Bills Receivable A/c Dr.		25,000
	To Vimal			25,000
	(Vimal's acceptance received)
Mar.18	Vimal Dr.		25,000
	To Bills Receivable A/c			25,000
	(Vimal acceptance dishonoured)

 

Books of Vimal Journal
Date	Particulars	L.F.	Debit Amount ₹	Credit Amount ₹
2016
Jan.15	Purchases A/c Dr.		25,000
	To Kamal			25,000
	(Goods bought from Kamal)
Jan.15	Kamal Dr.		25,000
	To Bills Payable A/c			25,000
	(Bill drawn by Kamal accepted)
Mar.18	Bills Payable A/c Dr.		25,000
	To Kamal			25,000
	(Bill drawn by Kamal dishonoured)

Case (ii): The bill was immediately discounted by Kamal with his bank @ 6% p.a

Books of Kamal Journal
Date	Particulars	L.F.	Debit Amount ₹	Credit Amount ₹
2016
Jan.15	Vimal Dr.		25,000
	To Sales A/c			25,000
	(Goods sold to Vimal)
Jan.15	Bills Receivable A/c Dr.		25,000
	To Vimal			25,000
	(Vimal's acceptance received)
Jan.15	Bank A/c Dr.		24,750
	Discount A/c Dr.		250
	To Bills Receivable A/c			25,000
	(Vimal's acceptance discounted at 6% p.a. with bank)
Mar.18	Vimal Dr.		25,000
	To Bank A/c			25,000
	(Vimal's acceptance dishonoured)

 

Books of Vimal Journal
Date	Particulars	L.F.	Debit Amount ₹	Credit Amount ₹
2016
Jan.15	Purchases A/c Dr.		25,000
	To Kamal			25,000
	(Goods bought from Kamal)
Jan.15	Kamal Dr.		25,000
	To Bills Payable A/c			25,000
	(Bill drawn by Kamal accepted)
Mar.18	Bills Payable A/c Dr.		25,000
	To Kamal			25,000
	(Bill drawn by Kamal dishonoured)

Case (iii): The bill was endorsed by Kamal in favour of his creditor Sharad

Books of Kamal Journal
Date	Particulars	L.F.	Debit Amount ₹	Credit Amount ₹
2016
Jan.15	Vimal Dr.		25,000
	To Sales A/c			25,000
	(Goods sold to Vimal)
Jan.15	Bills Receivable A/c Dr.		25,000
	To Vimal			25,000
	(Vimal's acceptance received)
Jan.15	Sharad Dr.		25,000
	To Bills Receivable A/c			25,000
	(Vimal's acceptance endorsed to Sharad)
Mar.18	Vimal Dr.		25,000
	To Sharad			25,000
	(Vimal's acceptance endorsed to Kamal dishonoured)

 

Books of Vimal Journal
Date	Particulars	L.F.	Debit Amount ₹	Credit Amount ₹
2016
Jan.15	Purchases A/c Dr.		25,000
	To Kamal			25,000
	(Goods bought from Kamal)
Jan.15	Kamal Dr.		25,000
	To Bills Payable A/c			25,000
	(Bill drawn by Kamal accepted)
Mar.18	Bills Payable A/c Dr.		25,000
	To Kamal			25,000
	(Bill drawn by Kamal dishonoured)

Case (iv): Five days before its maturity the bill was sent by Kamal to his bank for collection

Books of Kamal Journal
Date	Particulars	L.F.	Debit Amount ₹	Credit Amount ₹
2016
Jan.15	Vimal Dr.		25,000
	To Sales A/c			25,000
	(Goods sold to Vimal)
Jan.15	Bills Receivable A/c Dr.		25,000
	To Vimal			25,000
	(Vimal's acceptance received, payable after two months)
Mar.13	Bill Sent for Collection A/c Dr.		25,000
	To Bills Receivable A/c			25,000
	(Vimal's acceptance sent to bank for collection)
Mar.18	Vimal Dr.		25,000
	To Bill Sent for Collection			25,000
	(Vimal's acceptance dishonoured)

 

Books of Vimal Journal
Date	Particulars	L.F.	Debit Amount ₹	Credit Amount ₹
Case (iii)
2016
Jan.15	Purchases A/c Dr.		25,000
	To Kamal			25,000
	(Goods bought from Kamal)
Jan.15	Kamal Dr.		25,000
	To Bills Payable A/c			25,000
	(Bill drawn by Kamal accepted)
Mar.18	Bills Payable A/c Dr.		25,000
	To Kamal			25,000
	(Bill drawn by Kamal dishonoured)