BILL OF EXCHANGE QUESTION WITH ANSWER

Q.3.   Journalise the following transaction in the books of Nilesh.

(a)      Naresh informs Nilesh that Snajay’s acceptance for `. 8,000 endorsed to Naresh has been dishonoured. Noting charges `. 200.

(b)      Sujit renews his acceptance to Nilesh for `. 4,800 by paying `.1,600 in cash and accepting a new bill for the balance plus interest for 3 months @12% p.a.

(c)      Prakash’s acceptance to Nilesh for `.24,000 retired one month before its due date at a discount of 12% p.a.

(d)      Bank informs Nilesh, the dishonour of Prashant’s acceptance for `. 8,000, discounted with Bank. Noting charges  `.160.                                                   (12)

Journal of Nilesh

Date	Particulars	LF	Debit (`.)	Credit (`.)
1.	Sanjay A/c…………………………..Dr.      To Naresh A/c (Being endorsed bill dishonoured and noting charges paid)		8,200	8,200
2.	Sujit A/c………………………………Dr.      To Bills Receivable A/c (Being Bills cancelled)		4,800	4,800
3.	Sujit A/c………………………………Dr.      To Interest A/c (Being interest receivable)		96	96
4.	Cash A/c……………………………..Dr.      To Sujit A/c (Being part payment received)		1,600	1,600
5.	Bills Receivable A/c………………..Dr.      To Sujit A/c (Being new bill drawn and accepted due after 3 months)		3,296	3,296
6.	Cash A/c………………………………Dr. Discount A/c…………………………Dr.      To Bills Receivable A/c (Being Bill Retired)		23,760 240	24,000
7.	Prashant A/c…………………………Dr.      To Bank A/c (Being discounted bill dishonorued and noting charges paid)		8,160	8,160