Anand brought goods worth Rs. 4,500 from Samant on August 1, 2006. On the same day, Anand accepted the bill for Rs. 4,500 at 3 months drawn by Samant. Samant got the bill discounted with his bank at 4%. Before the due date, Anand informed Samant about his inability to pay the amount of bill. He further requested him to accept Rs. 2,500 in cash and immediately draw upon him a new bill for the remaining amount at 2 months together with interest at 8% p.a. Samant agreed. The second bill was duly paid on maturity. Give journal entries in the books of Samant and Anand.
Note: - Here 1stpart payment is made and then the interest is charged.
Date | Particulars | Jf | Debit | Credit |
1.8.06 | Anand’s account …… Dr. To sales a/c [being the goods are sold] | 4500 | 4500 | |
1.8.6 | Bills receivable account ……… Dr. To Anand’s account [being the bill is drawn] | 4500 | 4500 | |
1.8.6 | Cash / bank account ……… Dr. Discount account ……… Dr. To Bills receivable account [being the bill is discounted] | 4455 45 | 4500 | |
? | Anand’s account …… dr. To cash / bank account [being the bill is dishonoured] | 4500 | 4500 | |
? | Cash/ bank account To anand’s account [being the part payment is made] | 2500 | 2500 | |
? | Anand’s account To interest account [being the interest is charged] | 27 | 27 | |
? | Bills receivable account To anand’s account [being the new bill is drawn] | 2027 | 2027 | |
? | Cash/ bank account To bills receivable account [being the new bill is honoured] | 2027 | 2027 |