On 1st March, 2013. Ramchandra sold goods to Raman worth Rs. 8,000/- and Raman accepted the Bill for Rs. 8,000/- at 3 months drawn by Ramchandra. Ramchandra discounted the bill with his bank @ 6% p.a. On due date the bill was dishonoured and Raman requested Ramchandra to accept Rs. 4,000/- immediately and draw upon him a new bill for the remaining amount at 3 months together with an interest @ 10% p.a. Ramchandra agreed. The second Bill was duly honoured. Give Journal entries in the books of Ramchandra.

1.    On 1^st March, 2013. Ramchandra sold goods to Raman worth Rs. 8,000/- and Raman accepted the Bill for Rs. 8,000/- at 3 months drawn by Ramchandra. Ramchandra discounted the bill with his bank @ 6% p.a. On due date the bill was dishonoured and Raman requested Ramchandra to accept Rs. 4,000/- immediately and draw upon him a new bill for the remaining amount at 3 months together with an interest @ 10% p.a. Ramchandra agreed. The second Bill was duly honoured. Give Journal entries in the books of Ramchandra.

Solution:

Journal entries in the Books of Ramchandra.

Date	Particulars	LF	Debit (Rs)	Credit (Rs)
1.3.13	Raman's A/c ... Dr.		8000
	To Sales A/c			8000
	[Being the goods are sold]
1.3.13	Bills Receivable A/c …Dr.		8000
	To Raman's A/c			8000
	[Being the Bill is drawn]
1.3.13	Bank A/c …Dr.		7880
	Discount A/c … Dr.		120
	To Bills Receivable A/c			8000
	[Being the Bill is discounted with the bank @ 6% p.a. ]
4.6.13	Raman's A/c … Dr.		8000
	To Bank's A/c			8000
	[Being the discounted bill is dishonoured]
4.6.13	Raman's A/c … Dr.		100
	To Interest A/c			100
	[Being Interest is charged on balance amount]
4.6.13	Cash / Bank A/c … Dr.		4000
	To Raman's A/c			4000
	[Being the part payment is made]
4.6.13	Bills Receivable A/c …Dr.		4100
	To Raman's A/c			4100
	[Being the New bill is drawn along with balance and interest on balance amount]
7.9.13	Cash/Bank A/c …… Dr.		4100
	To Bills Receivable A/c			4100
	[Being the second bill is duly honoured]