BoE 4

Question Four Prepare journal entries to indicate how the following would appear in the ledger accounts of (a) Nono and, (b) Pefo. 2021 Jan 1 1 29 Feb April 1 Pefo sells goods P4 200 to Nono, and Nono sends Pefo a three months' acceptance for this amount. Pefo discounts the acceptance with SK Discount Co. Ltd, receiving its cheque for P4 120. One-third of Nono's inventory, valued at P36 000, is destroyed by fire. Nono claims on the underwriters at Bosu with whom she is insured. The underwriters admit the claim for P30 000 only as the total inventory was only insured for P90 000. In view of Nono's difficulties Pefo meets the acceptance due today by giving his cheque for P4260 to the SK Discount Co. Ltd; he draws on Nono a further bill for one month for P4360 (to include and P100 interest) which Nono accepts. Nono receives cheques from underwriters in settlement of the admitted claim. Nono's bank honours the acceptance presented by Pefo as due today. 4 9 7 May