BILL OF EXCHANGE QUESTION WITH ANSWER


Q.3.   Journalise the following transaction in the books of Nilesh.
(a)      Naresh informs Nilesh that Snajay’s acceptance for `. 8,000 endorsed to Naresh has been dishonoured. Noting charges `. 200.
(b)      Sujit renews his acceptance to Nilesh for `. 4,800 by paying `.1,600 in cash and accepting a new bill for the balance plus interest for 3 months @12% p.a.
(c)      Prakash’s acceptance to Nilesh for `.24,000 retired one month before its due date at a discount of 12% p.a.
(d)      Bank informs Nilesh, the dishonour of Prashant’s acceptance for `. 8,000, discounted with Bank. Noting charges  `.160.                                                   (12)

Journal of Nilesh
Date
Particulars
LF
Debit (`.)
Credit (`.)
1.
Sanjay A/c…………………………..Dr.
     To Naresh A/c
(Being endorsed bill dishonoured and noting charges paid)

8,200

8,200
2.
Sujit A/c………………………………Dr.
     To Bills Receivable A/c
(Being Bills cancelled)

4,800

4,800
3.
Sujit A/c………………………………Dr.
     To Interest A/c
(Being interest receivable)

96

96
4.
Cash A/c……………………………..Dr.
     To Sujit A/c
(Being part payment received)

1,600

1,600
5.
Bills Receivable A/c………………..Dr.
     To Sujit A/c
(Being new bill drawn and accepted due after 3 months)

3,296

3,296
6.
Cash A/c………………………………Dr.
Discount A/c…………………………Dr.
     To Bills Receivable A/c
(Being Bill Retired)

23,760
240


24,000
7.
Prashant A/c…………………………Dr.
     To Bank A/c
(Being discounted bill dishonorued and noting charges paid)

8,160

8,160