Question

Vicky owes Rs. 12,000 to Bunty and accepts 3 months' bill drawn by Bunty who discounts the same after a month at 10% p. a. with his bank. On due date the bill has been dishonoured and noting charges amounted to Rs. 100. Vicky then paid 25% of the amount of the bill and full amount of noting charges by crossed cheque and accepted a new bill for the balance plus interest at 12% p. a. for 3 months. New bill was sent to the bank for collection by Bunty. On due date the bank collected the amount of the new bill from Vicky and debited the bank charges Rs. 70 to Bunty's account. Pass Journal Entries in the books of Bunty and Bunty's account in the ledger of Vicky.

Answer 1

In the books of Bunty Journal
Date	Particulars		L.F.	Debit Amount (Rs)	Credit Amount (Rs)
	Bills Receivable A/c	Dr.		12,000
	To Vicky				12,000
	(Acceptance received)
	Bank A/c	Dr.		11,800
	Discounting Charges A/c	Dr.		200
	To Bills Receivable A/c				12,000
	(Bills Receivable discounted with bank)
	Vicky	Dr.		12,100
	To Bank A/c				12,100
	(Bills Receivable dishonored)
	Bank A/c	Dr.		3,100
	To Vicky				3,100
	(Cash received)
	Vicky	Dr.		270
	To Interest A/c				270
	(Interest due)
	Bills Receivable A/c	Dr.		9,270
	To Vicky				9,270
	(New acceptance received)
	Bills Sent for Collection A/c	Dr.		9,270
	To Bills Receivable A/c				9,270
	(Bills Receivable sent to bank for collection)
	Bank A/c	Dr.		9,200
	Bank Charges A/c			70
	To Bills Sent for Collection A/c				9,270
	(Bill collected)

Bunty’s Account
Dr.			Cr.
Date	Particulars	Amount (Rs)	Date	Particulars	Amount (Rs)
	Bills Payable A/c	12,000		Balance b/d	12,000
	Bank A/c	3,100		Bills Payable A/c	12,000
	Bills Payable (New) A/c	9,270		Noting Charges A/c	100
				Interest A/c	270
		24,370			24,370

Working Notes:

WN1 Calculation of Discount

\[\text{Amount of Discount} = 12, 000 \times \frac{10}{100} \times \frac{2}{12} = Rs 200\]

WN2 Calculation of Interest

\[\text{Amount of Interest} = 9, 000 \times \frac{12}{100} \times \frac{3}{12} = Rs 270\]