Page 157 - ISCDEBK-XI

17.22 Double Entry Book Keeping—ISC XI
In the Books of D
JOURNAL
Date Particulars L.F. Dr. (`) Cr. (`)
2021
June 1 S ...Dr. 30,000
To Bills Payable A/c (1) 20,000
To Bills Payable A/c (2) 10,000
(Being the acceptance of two bills of ` 20,000 and ` 10,000 given
to S for 2 and 3 months respetively)
August 4 Bills Payable Ac ...Dr. 20,000
Noting Charges A/c ...Dr. 500
To S 20,500
(Being the bill for ` 20,000 dishonoured, noting charges ` 500)
Sept. 4 Bills Payable A/c ...Dr. 10,000
Noting Charges A/c ...Dr. 500
To S 10,500
(Being the bill for ` 10,000 dishonoured, noting charges ` 500)
Sept. 5 Interest A/c ...Dr. 1,419
To S (WN) 1,419
(Being the interest payable for the extended period)
Sept. 5 S ...Dr. 32,419
To Bills Payable A/c 32,419
(Being the acceptance of a new bill for the balance plus, noting charges)
Dec. 8 Bills Payable A/c ...Dr. 32,419
To S 32,419
(Being the bill dishonoured at maturity)
Dec. 8 S ...Dr. 32,419
To Bank A/c 19,451*
To Deficiency or Profit & Loss A/c 12,968*
(Being ` 19,451 paid to S and the balance amount not paid
due to insolvency)
Working Note: Calculation of Interest for the extended period (Ignoring days): `
` 20,500 for 4 months @ 15% p.a. (` 20,500 × 4/12 × 15/100) 1,025
` 10,500 for 3 months @ 15% p.a. (` 10,500 × 3/12 × 15/100) 394 (Approx.)
1,419
*Approximately.
Illustration 12.
A sold goods to B for ` 30,000 on 1st January, 2021. A drew upon him a three months bill for
the amount. B accepted the bill and returned it to A who discounted the bill @ 10% p.a with a
bank on 4th January. On the due date, the bill is dishonoured by B, the noting charges being
` 100. On 4th April, 2021, B makes an offer to A to pay him ` 10,000 by current date cheque on
account and to settle the balance by agreeing to accept one bill of exchange for ` 12,000 at one
month, and the other for the balance at three months—the latter including interest @ 8% p.a.
for both the bills. B accepts the arrangement. The first bill is met on the due date. But before
the maturity of the second bill, B becomes insolvent and a dividend of 50 paise in the rupee is
realised from his estate on 4th July, 2021.
Pass Journal entries in respect of the above in the books of A and B.