Question

On 1^st April, 2022 Disha sold goods to Priya worth ₹ 50,000. Priya accepted the bill on the same date for 3 months drawn by Disha.

On 30^th June, 2022 Priya requested to Disha for renewal of the bill. Disha agreed on the condition that Priya should pay ₹ 20,000 in cash and accept a new bill for the balance plus interest ₹ 600. Priya accepted the new bill drawn by Disha for 2 months for the balance plus interest. On the due date of the new bill, it was honoured by Priya.

Pass Journal Entries and prepare Priya’s Account in the Books of Disha.

Answer 1

In the Books of the Disha Journal Entries
Date	Particulars	L.F.	Debit (₹)	Credit (₹)
April 1	Priya’s A/c    ...Dr.		50,000	-
	To Sales A/c		-	50,000
	(Being goods sold on credit)
April 1	Bills Receivable A/c    ...Dr.		50,000	-
	To Priya’s A/c		-	50,000
	(Being the bill drawn and acceptance received from Priya)
June 30	Priya’s A/c    ...Dr.		50,000	-
	To Bills Receivable A/c		-	50,000
	(Being cancellation of old bill for renewal)
June 30	Cash A/c    ...Dr.		20,000	-
	To Priya’s A/c		-	20,000
	(Being part payment received)
June 30	Priya’s A/c    ...Dr.		600	-
	To Interest A/c		-	600
	(Being interest charged on balance amount)
June 30	Bills Receivable A/c    ...Dr.		30,600	-
	To Priya’s A/c		-	30,600
	(Being new bill drawn for balance plus interest and acceptance received)
June 30	Cash/Bank A/c    ...Dr.		30,600	-
	To Bills Receivable A/c		-	30,600
	(Being new bill honoured on due date)
	Total		2,31,800	2,31,800

 

In the books of Disha
Dr.	Priya’s Account				Cr.
Date	Particulars	Amount (₹)	Date	Particulars	Amount (₹)
2022			2022
April 1	To Sales A/c	50,000	April 1	By Bills Receivable A/c	50,000
June 30	To Bills Receivable A/c	50,000	June 30	By Cash A/c	20,000
June 30	To Interest A/c	600	June 30	By Bills Receivable A/c	30,600
		1,00,600			1,00,600