Question

For the amount receivable Ms. Jaya draws a bill on Ms. Maya, on 1st January, 2010 for Rs 54,000, for a period of 4 months.

Maya accepts the bill and returns it to Jaya, who gets the bill discounted with bank @ 8% p.a. Before due date, Maya approaches Jaya and requests to accept Rs 36,000 in cash and draw a second bill for the balance.

Jaya draws a new bill for the balance plus interest @ 12% p. a. for two months on 4th May, 2010 as per the request and received the accepted bill from Maya.

Jaya sends the bill to the bank for collection. Maya honours her acceptance on the due date.

Pass Journal entries in the books of Ms. Jaya and show Ms. Jaya's account in the books of Ms. Maya.

Answer 1

In the books of Ms. jaya

Journal

Date	Particulars		L.F.	Debit Amount (Rs)	Credit Amount (Rs)
2010
Jan.01	Bills Receivable A/c	Dr.		54,000
	To Maya				54,000
	(Bill drawn and acceptance receivable from Maya)
Jan.01	Bank A/c	Dr.		52,560
	Discount Charges A/c			1,440
	To Bills Receivable A/c				54,000
	(Bills discounted with the bank @ 8% p.a. before due date)
May 04	Maya	Dr.		54,000
	To Bank A/c				54,000
	(Bills cancelled)
May 04	Cash A/c	Dr.		36,000
	To Maya				36,000
	(Cash received)
May 04	Maya	Dr.		360
	To Interest A/c				360
	(Interest due to be received)
May 04	Bills Receivable A/c	Dr.		18,360
	To Maya				18,360
	(New Bill drawn and acceptance receivable from Maya)
June 07	Bills Sent for Collection A/c	Dr.		18,360
	To Bills Receivable A/c				18,360
	(Bills sent for collection to the bank)
June 07	Bank A/c	Dr.		18,360
	To Bills Sent for Collection A/c         (Bill collected on the due date)				18,360

In the books of Ms. Maya

Ms .jaya Account 

Date		Particulars	Amount (Rs)	Date	Particulars	Amount (Rs)
2010				2010
Jan. 01		Bills Payable A/c	54,000	Jan. 01	Balance b/d	54,000
Mar. 04		Cash A/c	36,000	Mar. 04	Bills Payable A/c	54,000
Mar. 04		Bills Payable A/c (New bill accepted)	18,360	Mar. 04	Interest A/c	360
			1,08,360			1,08,360

 

WN2 Calculation of Interest

\[Amount of Discount = 54, 000 \times\frac{8}{100}\times\frac{4}{12}= Rs 1, 440\]

WN2Calculation of Interest

\[\text{Amount of Interest} = 18, 000 \times\frac{12}{100}\times\frac{2}{12}= Rs 360\]