Question

On 1^st Sept., 2010 Badrinath drew a bill of Rs 20,000 on Dinanath at 4 months. The bill was duly accepted by Dinanath. On 5^th Sept., 2010 Badrinath endorsed the bill in favour of Somnath. However on 1^st January, 2012 Dinanath approached to Badrinath and requested bill be renewed for a further period of 3 months at 15% p.a. Badrinath agreed and paid necessary money to Somnath. Before one month of the due date of the new bill Dinanath retired his acceptance @ 10% p.a.
          Pass journal entries in the books Badrinath and Dinanath.

Answer 1

                                            Books of Badrinath
                                               Journal Entry

Date	Particulars	L.F.	Debit Amount Rs	Credit Amount Rs
2010 Sept.01	Bills Receivable A/c         Dr.   To Dinanath A/c (Bill drawn and accepted)		20,000	20,000
Sept.05	Somnath A/c                  Dr.   To Bills Receivable A/c (Bill endorsed to Somnath)		20,000	20,000
2011 Jan.01	Dinnanth A/c                  Dr.   To Badrinath A/c (Bill cancelled)		20,000	20,000
Jan.01	Badrinath A/c                 Dr.    To Interest A/c  (Interest charges due on Rs. 20,000 @15% per annum for 3 months)		750	750
Jan.01	Bills Receivable A/c         Dr.     To Badrinath A/c (New bill was drawn and accepted including interest of Rs.750)		20,750	20,750
feb.01	Cash/Bank A/c                Dr. Rebate A/c                      Dr.      To Bills Receivable A/c (Bill retired under the rebate of 10% per annum, one month before the due date)		20,577 173	20,750

Books Of Dinanath
Journal Entry

Date	Particulars	L.F.	Debit Amount (Rs.)	Credit Amount (Rs.)
2010 Sept.01	Badrinath                               Dr.    To Bills Payable A/c (Bill accepted)		20,000	20,000
Jan.01	Bills Payable A/c                    Dr.     To Badrinath A/c (Bill Cancelled)		20,000	20,000
Jan.01	Interest A/c                           Dr.         To Badrinath A/c          (Interest charges due to Rs.20,000 @ 15% for 3 month		750	750
Jan.01	Badrinath A/c                         Dr. To Bills Payable A/c (Bill accepted with interest charges of Rs.750)		20,750	20,750
Feb.01	Bills Payable A/c                   Dr.         To Cash/Bank A/c         To Rebate A/c (Bill retired under the rebate of 10 % per annum, one month before the due date)		20,750	20,577 173