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1. When the goods are purchased.
Purchase A/c ……… Dr.
To Creditor’s A/c
[the person who sells the goods he is known as
creditor]
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2. When the bill is drawn.
Drawer’s A/c ……… Dr.
To Bills payable’s A/c
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3. Different ways of keeping Bill.
a. Kept with
Drawer himself.
No entry
b. Discounted
with the bank.
No entry
c. Endorsed
No entry
d. Sent to bank
for collection.
No entry
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4. When the Bill is Dishonoured.
a. Kept with
Drawer himself.
Bills payable a/c ……… Dr.
To Drawer’s A/c
b. Discounted
with the bank.
Bills payable a/c ……… Dr.
To Drawer’s A/c
c. Endorsed
Bills payable a/c ……… Dr.
To Drawer’s A/c
d. Sent to bank
for collection.
Bills payable a/c ……… Dr.
To Drawer’s A/c
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5. When the Bill is Honoured.
a. Kept with
Drawer himself.
Bills payable’s A/c ……… Dr.
To Cash/ Bank A/c
b. Discounted
with the bank.
Bills payable’s A/c ……… Dr.
To Cash/ Bank A/c
c. Endorsed
Bills payable’s A/c ……… Dr.
To Cash/ Bank A/c
d. Sent to bank
for collection.
Bills payable’s A/c ……… Dr.
To Cash/ Bank A/c
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6. When the part payment is made
Drawer’s A/c ……… Dr.
To Cash/ Bank A/c
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7. When the interest is charged.
Interest A/c ……… Dr.
To Drawer’s A/c
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8. When the Bill is retired.
Bills payable’s A/c ……… Dr.
To Cash / Bank A/c
To Discount A/c
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9. When the
drawee become insolvent.
Drawer’s A/c ………
Dr.
To Cash/ Bank
A/c
To Deficiency A/c
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10. When the noting charge is charged.
Noting charges a/c ……… Dr.
To Drawer’s A/c
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Journal Entries in the Books of Drawee
