Question

On Jan 01, 2016 Rao sold goods ₹ 10,000 to Reddy. Half of the payment was made immediately and for the remaining half Rao drew a bill of exchange upon Reddy payable after 30 days. Reddy accepted the bill and returned it to Rao. On the due date Rao presented the bill to Reddy and received the payment. Journalise the above transactions in the books Rao and prepare of Rao’s account in the books of Reddy.

Answer 1

Books of Rao Journal
Date	Particulars	L.F.	Debit Amount ₹	Credit Amount ₹
2016
Jan.01	Reddy Dr.		10,000
	To Sales A/c			10,000
	(Goods sold to Reddy)
Jan.01	Cash A/c Dr.		5,000
	To Reddy			5,000
	(Cash received from Reddy)
Jan.01	Bills Receivable A/c Dr.		5,000
	To Reddy			5,000
	(Bill received for 30 days accepted by Reddy)
Feb.03	Cash A/c Dr.		5,000
	To Bills Receivable A/c			5,000
	(Reddy's acceptance met on due date)

 

Dr.	Books of Reddy Rao's Account						Cr.
Date	Particulars	J.F.	Amount ₹	Date	Particulars	J.F.	Amount ₹
Jan.01	Cash		5,000	2011
Jan.01	Bills Receivable		5,000	Jan.01	Purchases		10,000
			10,000				10,000