Premlal sold goods to Sunderlal worth Rs. 10,000/- and Sunderlal accepted the bill for Rs. 10,000/- at 3 months drawn by Premlal. Premlal discounted the bill with his bank @ 6 % p.a. On due date the bill was dishonoured and Sunderlal requested Premlal to accept Rs. 4,000 immediately and draw upon him a new bill for the remaining amount at 3months together with an interest at 10% p.a. Premlal agreed and the second bill was duly honoured. Give the Journal entries in the books of Premlal.

Solution:
Journal Entries in the booms of Premlal.

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

10000


To Sales A/c


10000

[Being the goods are sold]



2.
Bills Receivable A/c …Dr.

10000


To Sunderlal's A/c


10000

[Being the Bill is drawn]



3.
Bank A/c …Dr.

9850


Discount A/c … Dr.

150


To Bills Receivable A/c


10000

[Being the Bill is discounted with the bank @ 6% p.a. ]



4.
Sunderlal's A/c … Dr.

10000


To Bank's A/c


10000

[Being the discounted bill is dishonoured]



5.
Sunderlal's A/c … Dr.

150


To Interest A/c


150

[Being Interest is charged on balance amount]



6.
Cash / Bank A/c … Dr.

4000


To Sunderlal's A/c


4000

[Being the part payment is made]



7.
Bills Receivable A/c …Dr.

6150


To Sunderlal's A/c


6150

[Being the New bill is drawn along with balance and interest on balance amount]



8.
Cash/Bank A/c …… Dr.

6150


To Bills Receivable A/c


6150

[Being the second bill is duly honoured]