Question

Journalise the following transactions in the books of Kedarnath:
1. Badrinath informs Kedarnath that Aloknath's Acceptance of Rs. 16,000 endorsed to Badrinath has been dishonoured and noting charges amounted to Rs. 500.

2. Somnath renews his acceptance of Rs. 14,400 to Kedarnath by paying cash Rs. 4,400 and accepting a new bill for 2 months for the balance plus interest @ 12% p.a.

3. Vishwanath retired his acceptance for Rs. 10,500 to Kedarnath by paying in cash Rs. 10,250

4. Recovered only 50% of the amount due from his private estate of Ramnath, who declared as insolvent, against his bill of Rs. 12,500.

Answer 1

Journal
Date	Particulars	L.F	Debit Amount (Rs)	Credit Amount (Rs)
1	Aloknath                 Dr.     To Badrinath (Endorsed bills receivable dishonoured and noting charges incurred)		16500	16500
2	Somnath               Dr.    To Bills Receivable A/c (Bills Receivable dishonoured)		14400	14400
	Cash A/c             Dr.    To Somnath (Cash received from Somnath)		4400	4400
	Somnath      Dr.     To Interest A/c (Interest due)		200	200
	Bills Receivable (new) A/c         Dr.     To Somnath (New bills receivable received)		10,200	10,200
3	Cash A/c                   Dr. Rebate A/c               Dr.    To Bills Receivable A/c (Amount of bill received under rebate from Vishwanath)		10250 250	10500
4	Cash A/c               Dr. Bad Debts A/c       Dr.     To Ramnath (Ramnath became insolvent, 50% amount was received from his estates)		6250 6250	12500

Working Notes:

1. Calculation of Interest due

Amount of Interest = 10,000 × 12/100 × 2/12 = Rs 200

2. Calculation of Final Compensation from Ramnath

Amount received from Ramnath = 12,500 × 50/100 = Rs 6,250