Question

Following was the position of debtor and creditor of Gautam as on 1.1.2017.

	Debtors ₹	Creditors ₹
Babu	5,000	–
Chanderkala	8,000	–
Kiran	13,500	–
Anita	14,000	–
Anju	–	5,000
Sheiba	–	12,000
Manju	–	6,000

The following transactions took place in the month of Jan 2017:

Jan.02	Drew on Babu at two months after date at full settlement for ₹ 4,800. Babu accepted the bill and returned it on 5.1.2017.
Jan.04	Babu’s bill discounted for ₹ 4,750.
Jan.08	Chanderkala sent a promissory note for ₹ 8,000 payable three months after date.
Jan.10	Promissory note received from Chanderkala discounted for ₹ 7,900
Jan.12	Accepted Sheiba draft for the amount due payable two months after date.
Jan.22	Anita sent his promissory note payable after two months.
Jan.23	Anita’s promissory note endorsed in favour of Manju.
Jan.25	Accepted Anju’s draft payable after three months.
Jan.29	Kiran sent ₹ 2,000 in cash and a promissory note for the balance payable after three months.

Record the above transactions in the proper subsidiary books.

Answer 1

Bills Receivable Book

No.

Date of Bill 2017

Date Received 2016

From whom of Bill

Drawer whom received

Acceptor

Where

Term Payable

Due date  2016

L.F

Amount ₹

Cash  Book  Folio

Remarks

01

Jan.02

Jan.05

Babu

Self

Babu

2 months

Mar.05

4,800

Total

4,800

 

Bills Payable Book

No.

Date of Bill 2017

To Whom Given

Drawer

Payee

Where payable

Term

Due date 2017

Ledger

Amount ₹

Date  paid

Cash  Book  Folio

Remarks

01

Jan.12

Sheiba

Sheiba

-

2 months

Mar.15

12,000

02

Jan25

Anju

Anju

-

2 months

Apr.28

5,000

Total

17,000

 

Dr.	Cash Book								Cr.
Date	Particulars	L.F.	Cash ₹	Bank ₹	Date	Particulars	L.F.	Cash ₹	Bank ₹
2017	Bills				2017
Jan.04	Receivable Bills			4,750
Jan.10	Receivable			7,900
Jan.29	Kiran		2,000		Jan.31	Balance c/d		2,000	12,650
			2,000	12,650				2,000	12,650

There is difference between Bills of Exchange and Promissory Note. In case of Promissory Note, parties are makers and payees. However, in Bills of Exchange parties are Drawer, drawee (acceptor) and payee on account difference Promissory Note has not been recorded in Bills Receivable and Bills Payable book.

Books of Gautam Journal
Date	Particulars	L.F.	Debit Amount ₹	Credit Amount ₹
2017
Jan.05	Discount Allowed A/c Dr.		200
	To Babu			200
	(Babu's acceptance received and allowed him discount ₹ 200)
Jan.04	Discount A/c Dr.		50
	To Bills Receivable A/c			50
	(Babu's acceptance discounted with a discount charge of ₹ 50)
Jan.08	Bills Receivable A/c Dr.		8,000
	To Chanderkala			8,000
	(Promissory Note from Chanderkala received)
Jan.10	Discount A/c Dr.		100
	To Bills Receivable A/c			100
	(Chanderkala's Promissory Note discounted with bank at discount of ₹ 100)
Jan.22	Bills Receivable A/c Dr.		14,000
	To Anita			14,000
	(Promissory Note received from Anita)
Jan.23	Manju Dr.		14,000
	To Bills Receivable A/c			14,000
	(Anita's Promissory Note endorsed to Manju)
Jan.29	Bills Receivable A/c Dr.		11,500
	To Kiran			11,500
	(Promissory Note from Kiran received)