Honouring and Dishonouring of Bill of Exchange

Shefali Traders drew a bill on Maya for ₹ 30,000 on 1st Oct. 2019 payable after 3 months. Calculate amount of discount in the following cases:

i) Shefali Traders discounted the bill on the same day @ 12% p.a.

ii) Shefali Traders discounted the bill on 1^st Nov. 2019 @ 12% p.a.

iii) Shefali Traders discounted the bill on 1^st Dec. 2019 @ 12% p.a.

Sagar drawn an after sight bill on 21st Nov. 2019 for ₹ 21,000 at 3 months on Prasad. The bill is discounted by Sagar at 8 % p. a. with his bank. On maturity, Prasad finds himself unable to make payment of the bill and requests Sagar to renew it. Sagar accepts the request and draws a new bill at one month for ₹ 21,750 including interest which was duly accepted by Prasad. Sagar deposits the bill into bank for the collection. Prasad honours the bill on the due date and Bank charges ₹ 250 as Bank Charges.

Pass necessary Journal Entries in the Books of Sagar and prepare Sagar’s account in the books of Prasad.

Give one word/phrase/term which can substitute the following statement:-

Conversion of Bill of Exchange into its present value

Journalise the following transactions in the books of Mrunal:

a) Bank informed that Aishwarya’s acceptance of ₹ 24,000 which was discounted had been dishonoured and bank paid Noting Charges ₹ 220. Bill was renewed at the request of Aishwarya for 2 months with interest of ₹ 480.

b) Received ₹ 4,630 from private estate of Ankur who was declared insolvent against bill accepted by him for ₹ 6,000.

c) Accepted a bill of ₹ 15,000 at 3 months drawn by Anushka for the amount due to her ₹  20,000 and balance paid by cheque.

d) Dishonoured our acceptance to Vivek ₹ 27,000 and Noting Charges paid by Vivek ₹ 700.

Journalise the following transactions in the books of Narendra: -

a) Narendra retires his acceptance to Upendra by paying ₹ 4,000 in cash and endorsing a bill accepted by Ramlal for ₹ 5,000.

b) Vikram’s acceptance to Narendra ₹ 6,000 retired one month before the due date at rebate of 12% p.a.

c) Dilip renews his acceptance to Narendra for ₹ 12,000 by paying ₹ 4,000 in cash and accepting a fresh bill for the balance plus interest at 12% p.a. for 3 months.

d) Bank informed Narendra that, Kartik’s acceptance for ₹ 13,000 to Narendra, discounted with the bank was dishonoured and Noting Charges paid by bank ₹ 140.

On 1^st Jan. 2020 Hemant sold goods of ₹ 18,500 to Nitin. On the same date, Hemant drew a bill of exchange for ₹ 18,500 at 2 months. On the due date, the bill was duly honoured.

Give Journal Entries in the Books of Hemant and Nitin. Prepare Hamant’s account in the books of Nitin.

Maya owed Pari ₹ 36,000. Maya accepted a bill drawn by Pari for the amount at 4 months. Pari endorsed the same bill to Jyoti. Before due date Maya approached Pari for renewal of bill. Pari agreed on condition that ₹ 12,000 be paid immediately together with interest on the remaining amount of 8% p.a. for 3 months and Maya should accept a new bill for the balance amount. These arrangements were carried through. However, before the due date, Maya became insolvent and only 50% of the amount could be recovered from her estate. Give Journal Entries in the books of Pari.

Sangeeta accepted a bill for ₹ 18,000 drawn by Geeta at 3 months. Geeta discounted the bill for ₹ 17,400. Before the due date Sangeeta approached Geeta for renewal of the bill. Geeta agreed on the condition that Sangeeta should pay ₹ 6,000 immediately and for the balance, she should accept a new bill for 4 months along with interest ₹ 550. The arrangements were carried through. But on the due date of new bill Sangeeta became insolvent and 35 paise in a rupee could be recovered from her estate.

Give Journal Entries in the Books of Sangeeta and prepare Sangeeta’s account in the books of Geeta.