Ronaldo owes Ricardo Rs.80,000. Ricardo then draws a bill for Rs. 80,000 on Ronaldo for a period of three months. Ronaldo accepts and return it to Ricardo. Ricardo discounted the bill with his bank @ 10 % p.a. On due date, the bill was dishonoured noting charges amount to Rs. 300. Ricardo then draws a bill for the balance plus interest of Rs. 1700. Before the due date of this bill Ronaldo pays the amount at a discount of Rs. 400 to retire the bill. Journal Entries Ronaldo.



Journal Entries in the Books of Ronaldo.

Date
Particulars
LF
Debit (Rs. )
Credit (Rs.)
1
Ricardo's A/c ..... Dr.

80000


To Bills Payable A/c


80000

[Being the bill is accepted]



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

80000


To Ricardo's A/c


80000

[Being the bill is dishonoured]



3
Noting charges A/c ..... Dr.

300


To Ricardo's A/c


300

[Being the Noting Charges is Charged]



4
Interest A/c ..... Dr.

1700


To Ricardo's A/c


1700
5
Ricardo's A/c ..... Dr.

82000


To Bills Payable A/c


82000

[Being the new bill is accepted together with noting charges and interest]



6
Bills Payable A/c ..... Dr.

82000


To Bank A/c


81600

To Discount A/c


400

[Being the new bill is retired]