Question No 20 Chapter No 13 – D.K Goal 11 Class

Question No 20 Chapter No 13

Three Bills of Exchange

20. A sold goods to B on 30th October, 2016 for Rs 14,000 and received three bills for Rs 2,000, Rs 4,000 and Rs 8,000 at 2,3 months duration respectively. He kept the first bill till Maturity; endorsed 2nd bill in favour of his creditor C and discounted the third bill on 3rd December, 2016 @18% p.a. the first and 2nd bills were duly met on maturity but the third bill was dishonoured, the bank paying Rs 40 as noting charges. On 3rd March 2017 B paid Rs 3,000 and noting charges in cash and accepted a new bill at 3 months after date for the balance plus Rs 150 as interest. The new bill was met on maturity. Give journal entries in the books of A and B both.

The solution of Question No 20 Chapter No 13: –

In the books of A
Date	Particulars		L.F.	Debit	Credit
2018
Oct.30	B A/c	Dr.		14,000
	To Sale A/c				14,000
	(Being Sold goods to B)
Oct.30	Bill Receivable A/c (i)	Dr.		2,000
	Bill Receivable A/c (ii)	Dr.		4,000
	Bill Receivable A/c (iii)	Dr.		8,000
	To B A/c				14,000
	(Being three bills drew on B and acceptance received from him.)
Oct.30	C A/c	Dr.		4,000
	To Bill Receivable A/c (ii)				4,000
	(Being bill endorsed to C )
Dec.3	Bank A/c	Dr.		7,760
	Discount A/c	Dr.		240
	To Bill Receivable A/c				8,000
	(Being third bill was discounted by A)
Jan.2	Cash A/c	Dr.		2,000
	To Bill Receivable A/c (i)				2,000
	(Being bill received on maturity)
Feb.3	Bill Receivable A/c	Dr.		8,000
	Noting Charges A/c	Dr.		40
	To noting Charges A/c				8,040
	(Being third bill was dishonoured )
Feb.3	Cash A/c	Dr.		3,040
	To Noting Charges A/c				3,000
	To B A/c				40
	(Being third bill was dishonoured )
Feb.3	B A/c	Dr.		150
	To Interest A/c				150
	(Being charged interest on B)
Feb.3	Bill Receivable A/c (iv)	Dr.		5,150
	To B A/c				5,150
	(Being new bill drawn on harish )
Apr.7	Cash A/c	Dr.		5,150
	To Bill Receivable A/c (iv)				5,150
	(Being bill was mat on maturity)

In the books of B
Date	Particulars		L.F.	Debit	Credit
2018
Oct.30	Purchases A/c	Dr.		14,000
	To A A/c				14,000
	(Being purchases goods from A)
Oct.30	A A/c	Dr.		14,000
	To Bill Payable A/c (i)				2,000
	To Bill Payable A/c (ii)				4,000
	To Bill Payable A/c (iii)				8,000
	(Being three bills drew by Satish acceptance by us.)
Jan.2	Bill Payable A/c (i)	Dr.		2,000
	To Cash A/c				2,000
	(Being first bill payable paid on maturity)
Feb.02	Bill Payable A/c(ii)	Dr.		4,000
	To Satish A/c				4,000
	(Being Bill dishonoured)
Mar.04	Bill Payable A/c (iii)	Dr.		8,000
	A A/c				8,000
	(Being third bill was dishonoured )
Mar.04	A  A/c (iii)	Dr.		3,000
	Noting Charges A/c	Dr.		40
	To Cash A/c				3,040
	(Being Cash paid and noting charges paid to A)
Mar.04	A  A/c	Dr.		5,150
	To Bill Payable A/c (iii)				5,150
	(Being bill paid on maturity)
Mar.04	Bill Payable A/c (iv)	Dr.		5,150
	To Cash A/c				5,150
	(The being bill was a mat on maturity)

Working Note: –

Calculation of Discounting Charges

Discounting Charges	=	8,000	x	18	X	2
				100		12
	=	Rs 240

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Also, Check out the solved question of all Chapters: –

D K Goel – New ISC Accountancy -(Class 11 – ICSE)- Solution

• Chapter 1 Evolution of Accounting & Basic Accounting Terms
• Chapter 2 Accounting Equations
• Chapter 3 Meaning and Objectives of Accounting
• Chapter 4 Double Entry System
• Chapter 5 Books of Original Entry – Journal 
• Chapter 6 Accounting for Goods and Service Tax (GST) (Coming soon)
• Chapter 7 Books of Original Entry – Cash Book (Coming soon)
• Chapter 8 Books of Original Entry – Special Purpose Subsidiary Books (Coming soon)
• Chapter 9 Ledger (Coming soon)
• Chapter 10 Trial Balance and Errors (Coming soon)
• Chapter 11 Bank Reconciliation Statement (Coming soon)
• Chapter 12 Depreciation (Coming soon)
• Chapter 13 Bills of Exchange (Coming soon)
• Chapter 14 Generally Accepted Accounting Principles(GAAP) 
• Chapter 15 Bases of Accounting
• Chapter 16 Accounting Standards and International Financial Reporting Standard(IFRS) (Coming soon)
• Chapter 17 Capital and Revenue 
• Chapter 18 Provisions and Reserves 
• Chapter 19 Final Accounts (Coming soon)
• Chapter 20 Final Accounts – With Adjustments (Coming soon)
• Chapter 21 Errors and their Rectification (Coming soon)
• Chapter 22 Accounts from Incomplete Records – Single Entry System (Coming soon)
• Chapter 23 Accounts of Not-for-Profit Organisations (Coming soon)
• Chapter 24 Computerised Accounting System (Coming soon)
• Chapter 25 Introduction to Accounting Information System (Coming soon)

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