Financial Accounting

$17.$ Mr$.\text{'}$K$\text{'}$ received from one of his customers a bill at three months for Rs$.8,000.$ He discounted it on the same day at $10\%$ per annum with his Bankers. On the date of maturity, the bill was dishonoured. He incurred noting charges of Rs$.50.$ However, the customer paid him Rs$.2,000$ in cash on the date of maturity and accepted a fresh bill at three months for the amount due from him.

Mr$.\text{'}$K$\text{'}$ gave the second bill to Mr$.\text{'}$R$\text{'}.$ one of his creditors.

Pass the necessary journal entries in the books of Mr$.$ K$.$

$/$C$.$A$.$ Inter, May $1973/$

$|$Ans : Discount : Rs$.200|$

$18.\text{'}$A$\text{'}$ draws two bills of exchange on $\text{'}B\text{'}$ one for Rs$.2,500$ and another for Rs$.5,000$ on $1-3-1992.$ The first bill is payable after two months and the second bill is payable after four months. On $15$th March, $1992,\text{'}$B$\text{'}$ approaches $\text{'}$A$\text{'}$ to renew the first bill for a further period of three months. $\text{'}A\text{'}$ agrees to do so if $\text{'}B\text{'}$ pays Rs$.500$ in cash immediately and accepts a fresh bill for the balance of the first bill. $\text{'}B\text{'}$ agrees to the proposal. On $1-6-1992,\text{'}$B$\text{'}$ retires both the bills for a discount of Rs$.100.$ Show the journal entries with proper narration in the books of $\text{'}A\text{'}$ and $\text{'}B\text{'}.$

$[$Bombay$,$

B$.$Com.$]$

$19.$ Rama sold goods to Krishna for Rs$.6,000$ on $1-1-86.$ On the same day, he drew three bills on Krishna; the first bill for Rs$.1\mathrm{.}000$ at $2$ months, the second for Rs$.2,000$ at $3$ months and the third for Rs$.3,000$ at $4$ months. Krishna accepted all the bills.

The first bill was endorsed by Rama to Arjuna. The second and the third bills were discounted in the bank for Rs$.1,970$ and Rs$.2,930$ respectively.

The third bill was dishonoured on the due date and noting charges paid amounted to Rs$.20.$ A fresh bill was drawn on Krishna for Rs$.3,100($including interest Rs$.80)$ for Rs$.3$ months. It was retired under rebate of Rs$.40$ before the due date.

Show journal entries in the books of Rama, Krishna and Arjuna.

$[$Mysore$,$

B$.$Com., Nov. $1988]$

$20.$ On $1-5-98$ Chandran drew a bill of exchange payable atter $3$ months on Balan for Rs$.6,000.$ Chandran got the bill discounted with his bankers at $18\%$ p$.$a$.$ On $4-5-98$ on the due date of the bill. Balan dishonoured the bill and Rs$.10$ as noting charges was paid by the Bank. Chandran agrees to accept Rs$.2,170$ in cash $($Rs$.170$ for noting charges and interest$)$ and draw another Bill of exchange for Rs$.4\mathrm{.}000$ payable after $2$ months. On the due date of the Second bill, Balan approached chandran and asked again for renewal of the bill for a further period of $3$ months. Chandran agreed to his request and received Rs$.240$ from Balan as interest in cash. The last bill was met at maturity by Balan.

Draft Journal entries in the Books of Chandran and Balan.

$[$Bharathiar$,$ Nov. $1999]$

$[$Ans : Discount on $1$st Bill : Rs$.270]$