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

Solution:

Journal Entries in the booms of Premlal.

Date	Particulars	LF	Debit (Rs)	Credit (Rs)
?  1.	Sunderlal's A/c … Dr.		10000
	To Sales A/c			10000
	[Being the goods are sold]
2.	Bills Receivable A/c …Dr.		10000
	To Sunderlal's A/c			10000
	[Being the Bill is drawn]
3.	Bank A/c …Dr.		9850
	Discount A/c … Dr.		150
	To Bills Receivable A/c			10000
	[Being the Bill is discounted with the bank @ 6% p.a. ]
4.	Sunderlal's A/c … Dr.		10000
	To Bank's A/c			10000
	[Being the discounted bill is dishonoured]
5.	Sunderlal's A/c … Dr.		150
	To Interest A/c			150
	[Being Interest is charged on balance amount]
6.	Cash / Bank A/c … Dr.		4000
	To Sunderlal's A/c			4000
	[Being the part payment is made]
7.	Bills Receivable A/c …Dr.		6150
	To Sunderlal's A/c			6150
	[Being the New bill is drawn along with balance and interest on balance amount]
8.	Cash/Bank A/c …… Dr.		6150
	To Bills Receivable A/c			6150
	[Being the second bill is duly honoured]