Sonia draws a bill on Moni for Rs. 6,000 at 4 months. Moni accepts the bill and returns it to Sonia who discounts the bill with the bank at a discount of 8% p.a. Before the due date of Bill Moni requested Sonia to accept Rs. 4000 in cash and draw a bill for the balance plus interest at 12% p.a. for two months. Sonia 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 Sonia.


Solution:
Journal Entries in the booms of Sonia                      

Date
Particulars
LF
Debit
(Rs)
Credit
(Rs)
1.
Bills Receivable A/c …Dr.

6000


To Moni's A/c


6000

[Being the Bill is drawn]



2.
Bank A/c …Dr.

5840


Discount A/c … Dr.

160


To Bills Receivable A/c


6000

[Being the Bill is discounted with the bank]



3.
Moni's A/c … Dr.

6000


To Bank's A/c


6000

[Being the discounted bill is dishonoured]



4.
Moni's A/c … Dr.

40


To Interest A/c


40

[Being Interest is charged on balance amount]



5.
Cash A/c ……… Dr.

4000


To Moni's A/c


4000

[Being the part payment is made]



6.
Bills Receivable A/c …Dr.

2040


To Moni's A/c


2040

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



7.
Bank for collection A/c …… Dr.

2040


To Bills Receivable A/c


2040

[Being the second bill is sent to bank for collection ]



8.
Bank A/c ……… Dr.

2040


To Bank for collection  A/c


2040

[Being the sent to bank for collection bill is honoured]



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