LF Date 2017 Jan. 1 Jan. 4 Dr. Dr. Dr. 926 Cr. LF Dr. Jan 1 Journal Dr. Cr. Particulars Bills Receivable Alc Dr. 5,000 To B Alc 5,000 (Being the bill drawn on B for own accommodation) Bank Alc Dr. 4,850 Discount on Bills Alc 150 To Bills Receivable Alc 5,000 (Being the bill discounted with the banker @ 12% p.a.) April 4 B AIC 5,000 Noting charges Alc 30 To Bank Alc 5,030 (Being the bill dishonoured at maturity and bank paid noting charges 30). In the books of B Journal Dr. Date Particulars 2017 A Alc 5,000 To Bills Payable Alc 5,000 (Being the acceptance of a bill from A for his accommodation) April 4 Bills Payable Alc 5,000 To A AIC 5,000 (Being the bill dishonoured at maturity owing to A's failure to provide us money) (ii) When the bill is drawn and accepted for the accommodation of both the drawer and the drawee When two persons are in need of funds, one of the parties draws a bill on the other. Here, after the bill is discounted with the banker, the realized cash is shared by the drawer and the drawee in an agreed proportion. The understanding is that the loss by way of discounting charges is also to be shared in the same ratio in which they share the proceeds. Before the due date of the bill, the drawer sends his share of the proceeds to the drawee. The drawee then arranges his share of the proceeds and meets the bill on the due date. Another way of accommodating both the parties who are in the need of funds is that they draw on each other a bill for similar amounts. Both the parties discount their respective bills with the bankers and at maturity, pay off their acceptances. Illustration 29 For the mutual accommodation of Hiru and Biru, Hiru accepts a bill drawn on him by Biru for three months for 73,000 on 1st January, 2017. Biru discounts the bill immediately for + 2,700 and remits 1/3rd of the proceeds to Hiru. Before the bill becomes due, Biru remits the balance due to Hiru to enable him to meet the bill. Hiru meets the bill on the due date. Draw up the Journal entries in the books of Hiru and Biru to record the above transactions Dr