Sun draws a bill on Moon for Rs. 15,000 at 3 months. Moon accepts the bill and return to Sun. Sun discounted the bill @ 10 % p.a. with the bank. On Maturity Moon finds herself unable to make payment of the bill and requested Sun to renew the bill. Sun accepts the proposal on the condition that Moon should Pay Rs. 12,000 in cash and accept a new bill at one month along with interest at 10% p.a. These arrangements were carried through. Moon retires the bill by paying Rs. 3015/- Pass Journal Entries in the books of Sun.

Journal Entries in the books of Sun


Date
Particulars
LR
Debit (Rs)
Credit (Rs)
? 1
Bills Receivable A/c ......Dr.

15000


To Moon's A/c


15000

[Being the bill is drawn]



2
Bank A/c ......Dr.

14625


Discount A/c ......Dr.

375


To Bills Receivable A/c


15000

[Being the bill is discounted]



3.
Moon's A/c ......Dr.

15000


To Bank's A/c


15000

[Being the discounted bill is dishonoured]



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

25


To Interest A/c


25

[Being the interest is charged]



5
Cash A/c ......Dr.

12000


To Moon's A/c


12000

[Being the part payment is made]



6
Bills Receivable A/c ......Dr.

3025


To Moon's A/c


3025

[Being the new bill is drawn along with interest]



7
Bank A/c ......Dr.

3015


Rebate A/c ......Dr.

10


To Bills Receivable A/c


3025

[Being the new bill is retires]