N Gudgeon sells goods to two companies on July 1 19X7.

He draws bills of exchange on each of them and they are both accepted.
He discounts both of the bills with the bank on July 4 19X7, and suffers discounting charges of \(£ 80\) on Johnson's bill and \(£ 65\) on Scarlet's bill. On September \(119 \times 7\) the bills mature and Johnson Ltd meets its liability. Scarlet's bill is dishonoured and is duly noted on September 4 , the noting charge being \(£ 6\).
Show the above in the necessary accounts:

(a) In the books of Gudgeon.

(b) In the books of Scarlet Ltd and of Johnson Ltd.

Transcribed Image Text:

To R Johnson Ltd 2,460 To B Scarlet & Co Ltd. 1,500