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927 Dec. 31 To Interest Alc Dec. 31 By Balance of 71,446 Aug. 31 To Interest Alc Product 9.79 Dec. 31 71.446 By Balance old
927 Dec. 31 To Interest Alc Dec. 31 By Balance of 71,446 Aug. 31 To Interest Alc Product 9.79 Dec. 31 71.446 By Balance old 83.79 5 X 365 100 2.06,196 1,353.79 2,06,196 1,353.79 Tutorial Notes: (1) It is assumed that the bill was honoured on the due date. The due date of the bill should be treated as the date of payment and days to be calculated from the due date to the date of account, and (2) While counting the number of days for opening balances, the opening date as well as the date upto which the account is prepared, is included. Red-ink Interest In case the due date of a bill falls after the date of closing the account, generally no interest is allowed for that. However, interest from the date of closing to such due date is written in Red-ink' in the appropriate side of the Account Current'. This interest is called Red-ink Interest. This Red-ink Interest is treated as negative interest, In actual practice, however, the product of such bill [value of bill x (due date closing date)] is written in ordinary ink on the opposite side on which the bill is entered. Illustration 20 Mehra owed 3,000 on 1st January, 2016 to Mr Somesh. The following are the transactions that took place between them during 2016. It is agreed between the parties that interest @ 6% p.a. is to be calculated on all transactions: January 16 Mr Somesh sold goods to Mr Mehta 2,000 January 26 Mr Somesh purchases goods from Mr Mehta 1,500 February 10 Mr Somesh paid cash 1,500 March 13 Mr Mehta accepts a bill drawn by Somesh for 1 month 2,000 They desire to settle their accounts by one single payment on 15 March, 2016. Ascertain the amount to be paid to the nearest rupee. Ignore days of grace
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