Archana purchased goods from Babita on credit for Rs. 20,000. On next day
Archana paid Rs. 10,000 to Babita and accepted a bill drawn by Babita for the
balance amount for four months. Babita discounted the bill with her bank for
Rs. 9600/-. Before the due date Archana approached Babita with a request to
renew the Bill. Babita agreed with the condition that Archana should pay Rs.
6000 along with interest of Rs. 120 and accept a new bill for the balance.
These arrangements were duly carried out. New bill is met on the due date. Pass
journal entries in the books of Babita.
Solution:
Journal Entries
in the booms of Babita.
|
Date
|
Particulars
|
LF
|
Debit
(Rs)
|
Credit
(Rs)
|
|
? 1.
|
Archana's A/c … Dr.
|
|
20000
|
|
|
|
To Sales A/c
|
|
|
20000
|
|
|
[Being the goods are sold]
|
|
|
|
|
2.
|
Cash/Bank A/c … Dr.
|
|
10000
|
|
|
|
To Archana's A/c
|
|
|
10000
|
|
|
[Being the part payment is made]
|
|
|
|
|
3.
|
Bills Receivable A/c …Dr.
|
|
10000
|
|
|
|
To Archana's A/c
|
|
|
10000
|
|
|
[Being the Bill is drawn]
|
|
|
|
|
3.
|
Bank A/c …Dr.
|
|
9600
|
|
|
|
Discount A/c … Dr.
|
|
400
|
|
|
|
To Bills Receivable A/c
|
|
|
10000
|
|
|
[Being the Bill is discounted with the bank]
|
|
|
|
|
4.
|
Archana's A/c … Dr.
|
|
10000
|
|
|
|
To Bank's A/c
|
|
|
10000
|
|
|
[Being the discounted bill is dishonoured]
|
|
|
|
|
5.
|
Archana's A/c … Dr.
|
|
120
|
|
|
|
To Interest A/c
|
|
|
120
|
|
|
[Being Interest is charged on balance amount]
|
|
|
|
|
6.
|
Cash / Bank A/c … Dr.
|
|
6120
|
|
|
|
To Archana's A/c
|
|
|
6120
|
|
|
[Being the part payment is made along with interest]
|
|
|
|
|
7.
|
Bills Receivable A/c …Dr.
|
|
4000
|
|
|
|
To Archana's A/c
|
|
|
4000
|
|
|
[Being the New bill is drawn for balance amount]
|
|
|
|
|
8.
|
Cash/Bank A/c …… Dr.
|
|
4000
|
|
|
|
To Bills Receivable A/c
|
|
|
4000
|
|
|
[Being the second bill is duly honoured]
|
|
|
|