Journal Entries in the books of Drawer

1. When the goods are Sold. Debtor’s A/c……… Dr. To Sales A/c [the person who purchases the goods he is known as debtor]

2. When the bill is drawn. Bills Receivable A/c ……… Dr. To Drawee’s A/c

3. Different ways of keeping Bill. a. Kept with Drawer himself. No entry b. Discounted with the bank. Cash / Bank A/c ……… Dr. Discount A/c ………Dr.           To Bills Receivable A/c c. Endorsed Endorsee’s A/c ………Dr. To Bills Receivable A/c d. Sent to bank for collection. Bank for collection A/c ………Dr.           To Bills Receivable A/c

4. When the Bill is Dishonoured. a. Kept with Drawer himself. Drawee’s a/c ……… Dr. To Bills Receivable A/c b. Discounted with the bank. Drawee’s a/c ……… Dr. To Cash / Bank  A/c  c. Endorsed Drawee’s a/c ……… Dr. To Endorsee’s A/c d. Sent to bank for collection. Drawee’s a/c ……… Dr. To Bank for collection  A/c

5. When the Bill is Honoured. a. Kept with Drawer himself. Cash / Bank A/c ……… Dr. To Bills receivable A/c b. Discounted with the bank. No entry c. Endorsed No entry d. Sent to bank for collection. Cash /Bank A/c ……… Dr. To Bank for collection A/c

6. When the part payment is made Cash / bank A/c ……… Dr. To Drawee’s A/c

7. When the interest is charged. Drawee’s A/c ……… Dr. To Interest  A/c

8. When the Bill is retired. Cash / Bank A/c ……… Dr. Rebate’s A/c ……… Dr To Bill’s Receivable A/c

9. When the drawee become insolvent. Cash / bank A/c ……… Dr. Bad debts A/c ……… Dr. To Drawee’s A/c

10. When the noting charge is charged.  The amount of noting charges will be added to the dishonoured bill and no separate entry would be passed.