Ajith accepted a bill for Rs. 10,000 drawn by Surya at three months. Surya got the bill discounted with his bank for Rs. 9,700. Before the due date, Ajith approached Surya for renewal of the Bill. Surya agreed on the condition that Rs. 7,000 is paid immediately together with an interest on remaining amount at 18% p.a. for four months and for the balance Ajith should accept a new bill. But afterwards Ajith become insolvent and only 25% of the amount could be recovered from her estate. Pass journal entries in the books of Surya.

Journal Entries in the books of Surya

Date	Particulars	LF	Debit (Rs)	Credit (Rs)
? 1	Bills Receivable A/c .......Dr.		10000
	To Ajith's A/c			10,000
	[Being the bill is drawn]
2	Bank A/c .......Dr.		9700
	Discount A/c .......Dr.		300
	To Bills Receivable A/c			10000
	[Being the bill is discounted]
3	Ajith's A/c .......Dr.		10000
	To Bank A/c			10000
	[Being the discounted bill is dishonoured]
4	Ajith's A/c .......Dr.		180
	To Interest A/c			180
	[Being the Interest is charged]
5	Bank A/c .......Dr.		7180
	To Ajith's A/c			7180
	[Being the part payment is made along with interest]
6	Bills Receivable A/c .......Dr.		3000
	To Ajith's a/c			3000
	[Being the new bill is drawn]
7	Ajith's A/c .......Dr.		3000
	To Bills Receivable A/c			3000
	[Being the new bill is dishonoured]
8	Bank A/c .......Dr.		750
	Bad debts A/c .......Dr.		2250
	To Ajith's A/c			3000
	[Being the drawee become insolvent and only 25% of the amount could be recovered from her estate]