Nazriya draws a bill on Anitha for Rs. 60,000 at 4 months. Anitha accepts the bill and returns it to Nazriya who discounts the bill with the bank at a discount of 10% p.a. Before the due date of Bill Anitha requested Nazriya to accept Rs. 40000 in cash and draw a bill for the balance plus interest at 12% p.a. for two months. Nazriya draws a bill as the request is agreed. The bill is sent to bank for collection. On the due date the bill was honoured. Pass the necessary journal entries in the books of Anitha.

Journal Entries in the Books of Anitha. 


Date
Particulars
LF
Debit
Credit
1
Nazriya's A/c ......Dr.

60000


To Bills Payable A/c


60000

[Being the bill is accepted]



2
Bills Payable A/c ......Dr.

60000


To Nazriya's A/c


60000

[Being the bill is dishonoured]



3
Interest A/c ......Dr.

400


To Nazriya's A/c


400

[Being the Interest is charged]



4
Nazriya's A/c ......Dr.

40000


To Cash A/c


40000

[Being the part payment is made]



5
Nazriya's A/c ......Dr.

20400


To Bills Payable A/c


20400

[Being the new bill is accepted along with interest]



6
Bills payable A/c ......Dr.

20400


To Bank A/c


20400

[Being the new bill is duly honoured]