Question

Give journal entries of the following in the books of Daulat.

1. Sarita’s acceptance for 3 months of ₹ 20,000 was discounted with the bank at ₹ 19,800.
2. Siddhi’s acceptance of ₹ 15,000 was retired one month before the due date at a rebate of 12% p.a.
3. Prachiti’s acceptance of ₹ 9,750 is endorsed in favour of Bhumika in full settlement of her account of ₹ 10,000.
4. Sold goods to Madhura for ₹ 20,000 @ 10% trade discount. Received half the amount in cash and for the balance a bill for 2 months, which was accepted by Madhura. On the due date, Madhura meets the bill.

Answer 1

Journal Entries in the books of Daulat
Date	Particulars	L.F.	Debit (₹)	Credit (₹)
1.	Bank A/c   ...Dr.		19,800	-
	Discount A/c   ...Dr.		200	-
	To Bills Receivable A/c		-	20,000
	(Being Sarita’s acceptance discounted with the bank.)
2.	Cash/Bank A/c   ...Dr.		14,850	-
	Rebate A/c ...Dr.		150	-
	To Bills Receivable A/c		-	15,000
	(Being Siddhi’s acceptance retired at 12% p.a. rebate.)
3.	Bhumika’s A/c   ...Dr.		10,000	-
	To Bills Receivable A/c		-	9,750
	To Discount Received A/c		-	250
	(Being bill endorsed to Bhumika in full settlement.)
4. (i)	Cash A/c   ...Dr.		9,000	-
	Bills Receivable A/c   ...Dr.		9,000	-
	To Sales A/c		-	18,000
	(Being goods sold at 10% T.D., half cash and half bill received.)
4. (ii)	Cash/Bank A/c   ...Dr.		9,000	-
	To Bills Receivable A/c		-	9,000
	(Being Madhura’s bill honored on the due date.)

Working Notes:

(1) Discounting Sarita’s Acceptance:

Discount = 20,000 − 19,800

= 200

(2) Retirement of Siddhi’s Acceptance:

Rebate calculation = `15,000 xx 12/100 xx 1/12`

= 150

Amount received = 15,000 − 150

= 14,850

(3) Endorsement to Bhumika:

Discount received = Debt − Bill value

= 10,000 − 9,750

= 250

(4) Transactions with Madhura:

Net Sales: 20,000 − (10% of 20,000) = 18,000 (Trade discount is not recorded in the books.)

Cash Received: 50% of 18,000 = 9,000

Bill amount: 50% of 18,000 = 9,000