On 14th May 2012 Rohit Sold Goods on Credit to Devidas for Rs. 30,000. on the Same Date, Rohit Draws a Bill on Devidas for Rs. 30,000 at 4 Months These Arrangements Were Carried Through. Give Journal Entries in the Books of Rohit. - HSC Commerce (Marketing and Salesmanship) 12th Board Exam - Book Keeping and Accountancy

Question

On 14^th May 2012 Rohit sold goods on credit to Devidas for Rs. 30,000. On the same date, Rohit draws a bill on Devidas for Rs. 30,000 at 4 months. Devidas accepted it and returned to Rohit. On 17^th June 2012, Rohit discounted the bill with his bank @ 10% p.a. On the due date, Devidas finds himself unable to make payment of the bill and requests Rohit to renew it. Rohit accepted the proposal on the condition that Devidas should pay Rs. 10,000 on account along with interest Rs. 500 in cash and should accept a new bill for the balance at 2 months. These arrangements were carried through. Give Journal Entries in the books of Rohit.

Solution

In the books of Rohit Journal

Date

Particulars

L.F.

Debit Amount (Rs)

Credit Amount (Rs)

2012

May 14

Devidas Dr.

To Sales A/c

(Goods sold to Devidas on credit)

30,000

May 14

Bills Receivable A/c Dr.

To Devidas

(Bill received from Devidas)

30,000

June 17

Bank A/c Dr.

Discounting Charges A/c Dr.

To Bills Receivable A/c

(Bills Receivable discounted with a bank)

29,250

750

30000

Sept. 17

Devidas Dr.

To Bank A/c

(Discounted bill receivable dishonoured)

30,000

Sept. 17

Devidas Dr.

To Interest A/c

(Interest due)

500

Sept. 17

Cash A/c Dr.

Bills Receivable A/c (New) Dr.

To Devidas

(Cash and acceptance received)

10,500

20,000

30,500

Nov. 20

Cash A/c Dr.

To Bills Receivable A/c (New)

(Cash received)

20,000

Working Notes:

WN1 Calculation of Amount of Discount

Amount of discount = 30,000 × 10/100 × 3/12 = Rs 750

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Question 4 | 10.00 marks

Solution On 14th May 2012 Rohit Sold Goods on Credit to Devidas for Rs. 30,000. on the Same Date, Rohit Draws a Bill on Devidas for Rs. 30,000 at 4 Months These Arrangements Were Carried Through. Give Journal Entries in the Books of Rohit. Concept: Accounting Treatment - Discounting the Bill with the Bank Honour/Dishonour and Insolvency.

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